NextWave Wireless Announces Third Quarter 2007 Financial Results



    Company Reports 166 Percent Quarterly Revenue Growth Compared to Third
Quarter 2006

    SAN DIEGO, November 14 /CNW/ - NextWave Wireless Inc. (NASDAQ:   WAVE), a
global provider of wireless broadband and mobile multimedia products, filed
its Quarterly Report on Form 10-Q for the third fiscal quarter which ended
September 29, 2007. Financial schedules are included with this release.

    NextWave reported that its third quarter revenues increased 166 percent
compared to third quarter 2006. Revenues were $17.8 million for the third
quarter of 2007, an $11.1 million increase over the third quarter in 2006 and
a $4.9 million increase over the second quarter in 2007. The robust increase
in quarterly revenue was driven by the continued growth in mobile device
software royalties generated by the company's PacketVideo subsidiary and by
increased sales of wireless broadband network equipment and subscriber devices
by the company's IPWireless, Inc. subsidiary which was acquired in the second
quarter of 2007.

    "We are very pleased with the rapid revenue growth achieved by our
PacketVideo and IPWireless subsidiaries this quarter and the transition from
early-stage development to pre-commercialization status of our WiMAX chipset
business," said Allen Salmasi, chairman and chief executive officer of
NextWave Wireless Inc. "These achievements are the direct result of the
investments we have made in our people, our business, and our technologies."

    NextWave reported that its loss from operations was $91.7 million for the
third quarter of 2007, representing an increase of $65.3 million, when
compared to the loss from operations for the third quarter of 2006 and an
increase of $32.2 million over the second quarter of 2007. Approximately forty
percent, or $36.9 million, of the loss was attributable to the accounting for
the acquisition of the GO Networks and IPWireless businesses during the first
half of the year, and from the integration of the operations of those
businesses. NextWave expects to realize improved contributions from these
businesses in the future resulting from the achievement of operating
efficiencies, improved margin contributions and the one-time nature of
approximately $11.2 million of these charges.

    Loss from operations during the third quarter of 2007, as compared to the
third quarter of 2006, increased primarily due to increased operating expenses
of $76.4 million, of which $18.3 million were non-cash expenses arising from
the accounting for purchased in-process R&D and the amortization of intangible
assets as a result of the acquisition of GO Networks and IPWireless and new
spectrum properties. Approximately $31 million of the increase in operating
loss was attributable to increases in R&D, of which $17.5 million was due to
the growth of the semiconductor engineering team at NextWave Broadband and
activities related to the commercialization of the company's family of WiMAX
chipsets and $10.9 million was attributable to the addition of the IPWireless
and GO Networks operations earlier in the year. The addition of the IPWireless
and GO Networks operations in the first half of 2007 also accounted for
additional increases in operating expenses of $16.2 million attributable to
increases of $11.1 million in cost of revenues and $5.1 million in sales,
marketing, and G&A expenses.

    Excluding cost of revenues for the quarter of $17.3 million, total
operating expenses for the third quarter were $92.2 million, of which
thirty-three percent, or $30.3 million, were attributable to non-cash
expenses, including $8.7 million for the amortization of intangible assets
related to acquisitions, $6.9 million for non-cash share based and other
compensation expense, $3.5 million for depreciation and $11.2 million for
In-Process Research and Development (IPR&D) expense related to the acquisition
of IPWireless, Inc.

    Net interest expense for the third quarter of 2007 was $7.2 million, a
$1.6 million increase over the third quarter of 2006 and a $1.2 million
increase from the second quarter of 2007. The increase in interest expense
over the second quarter and compared to the third quarter of 2006 was driven
primarily by interest expense related to the issuance of $350 million of 7%
Senior Secured Notes in July 2006, and available cash balance during the third
quarter.

    Net loss available to common shares for the third quarter of 2007 was
$(107.8) million, or $(1.17) per share, compared to a net loss available to
common shares of $(31.8) million, or $(0.39) per share for the third quarter
of 2006 and a net loss available to common shares of $(72.1) million, or
$(0.81) per share, for the second quarter of 2007.

    During the third quarter of 2007, NextWave Broadband announced the
release of its NW1000 Series WiMAX chipset; the first generation in a family
of WiMAX baseband and multi-band RFIC chipsets designed to provide wireless
device and network equipment manufacturers with an advanced platform to
develop next-generation WiMAX mobile terminal and infrastructure products. The
company's second-generation chips, designed for high-volume, full-commercial
production is planned for the first half of 2008.

    Consistent with its strategy to acquire and make available licensed
spectrum to network operators who deploy the company's wireless broadband
products and technologies, NextWave, through its Inquam Broadband GmbH
subsidiary, completed its acquisition of a 65% controlling interest in
Zurich-based WiMAX Telecom AG which has wireless broadband spectrum
concessions in Austria, Slovakia, and Croatia.

    In July 2007, NextWave announced the launch of its Latin American
business operation, NextWave Wireless - Latin America. The new business unit
was established to deliver NextWave's broad array of industry-leading mobile
broadband and wireless technology solutions to customers throughout the Latin
American region.

    Recently, on November 5, 2007, PacketVideo announced that it has joined
the Open Handset Alliance as a founding member, along with more than 30 other
industry leaders including Google. PacketVideo is responsible for supplying
the multimedia sub-system, providing for essential media features for media
device development, of the OpenCORE(TM) software for the Alliance's Android
platform. PacketVideo expects to market a broad suite of innovative
applications, features, and services designed to enhance its contributed
OpenCORE(TM) software.

    "Our third quarter results are consistent with our expectations and will
further strengthen our position for future growth. We're looking forward to a
successful commercial launch of our low-power, 65 nanometer, WiMAX baseband
and RFIC products in 2008 including a fully-integrated Wi-Fi and WiMAX chipset
with matched multi-band RFIC that supports global roaming and unique broadcast
capabilities. To accelerate the commercial introduction of our WiMAX chipsets
and technologies, we have also undertaken joint development activities with
world-class device vendors," Salmasi added. "We also remain very excited about
the prospects of our TDtv(TM) mobile broadcast technology which has already
been successfully tested by some of the largest carriers in Europe. IPWireless
and PacketVideo are currently working with major device manufacturers to
incorporate our TDtv chipsets, embedded multimedia software and other
technologies into a wide range of exciting 3G devices."

    
                            NEXTWAVE WIRELESS INC.
                         CONSOLIDATED BALANCE SHEETS
                    (in thousands, except par value data)

                                                    September   December
                                                        29,         30,
                                                       2007        2006
                                                    ----------- ----------
                        ASSETS                      (unaudited)
    Current assets:
     Cash and cash equivalents                      $   72,871  $  32,980
     Short-term investments                            188,854    167,705
     Accounts receivable, net of allowance for
      doubtful accounts of $375 and $321,
      respectively                                      22,722      5,056
     Inventory                                           4,638        266
     Deferred contract costs                            20,821      2,397
     Prepaid expenses and other current assets          12,145      7,571
                                                    ----------- ----------
      Total current assets                             322,051    215,975
    Restricted cash                                     75,000     75,000
    Wireless spectrum licenses, net                    574,931    527,998
    Goodwill                                           140,262     32,184
    Other intangible assets, net                        80,813     18,570
    Property and equipment, net                         43,547     17,529
    Other noncurrent assets                              6,782      9,823
                                                    ----------- ----------
     Total assets                                   $1,243,386  $ 897,079
                                                    ----------- ----------
         LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                               $   28,785  $   1,630
     Accrued expenses                                   57,829     33,537
     Current portion of long-term obligations            6,223      3,065
     Deferred revenue                                   49,592     10,253
     Other current liabilities and deferred credits      3,034      1,240
                                                    ----------- ----------
      Total current liabilities                        145,463     49,725
                                                    ----------- ----------
    Deferred income tax liabilities                     85,556     75,774
    Long-term obligations, net of current portion      316,552    298,030
    Other long-term obligations, deferred credits
     and reserves                                        5,924      3,324
                                                    ----------- ----------
       Total liabilities                               553,495    426,853
    Minority interest in subsidiary                         --      1,048
    Commitments and contingencies
    Redeemable Series A Senior Convertible
     Preferred Stock, $0.001 par value; 355 shares
     authorized; 355 shares issued and outstanding,
     liquidation preference of $368,814 at
     September 29, 2007                                364,919         --
                                                    ----------- ----------
    Stockholders' equity:
     Preferred stock, $0.001 par value; 25,000
      shares authorized; 355 shares designated as
      Series A Senior Convertible Preferred Stock;
      no other shares issued or outstanding                 --         --
     Common stock, $0.001 par value; 400,000 shares
      authorized; 92,666 and 83,716 issued and
      outstanding at September 29, 2007, and
      December 30, 2006, respectively                       93         84
     Additional paid-in-capital                        691,315    620,423
     Accumulated other comprehensive loss                   48       (357)
     Accumulated deficit                              (366,484)  (150,972)
                                                    ----------- ----------
      Total stockholders' equity                       324,972    469,178
                                                    ----------- ----------
        Total liabilities and stockholders' equity  $1,243,386  $ 897,079
                                                    ----------- ----------
    

    
                            NEXTWAVE WIRELESS INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except per share data) (unaudited)

                                  Three Months Ended   Nine Months Ended
                                 -------------------- --------------------
                                 September  September September  September
                                     29,       30,        29,       30,
                                    2007      2006       2007      2006
                                 ---------- --------- ---------- ---------
    Revenues                     $  17,752  $  6,670  $  38,330  $ 16,868
                                 ---------- --------- ---------- ---------
    Operating expenses:
    Cost of revenues                17,324     3,506     31,538     7,951
    Engineering, research and
     development                    42,556    11,634     99,953    36,017
    General and administrative      30,939    14,896     70,351    35,528
    Sales and marketing              7,449     2,992     16,684     7,144
    Purchased in-process
     research and development
     costs                          11,200        --     12,060     1,648
                                 ---------- --------- ---------- ---------
      Total operating expenses     109,468    33,028    230,586    88,288
                                 ---------- --------- ---------- ---------
        Loss from operations       (91,716)  (26,358)  (192,256)  (71,420)
                                 ---------- --------- ---------- ---------
    Other income (expense)
     Interest income                 4,870     3,419     12,387     9,803
     Interest expense              (12,033)   (9,010)   (34,619)   (9,684)
     Other income and expense,
      net                           (1,622)      (26)    (1,320)       98
                                 ---------- --------- ---------- ---------
      Total other income
       (expense), net               (8,785)   (5,617)   (23,552)      217
                                 ---------- --------- ---------- ---------
        Loss before provision
         for income taxes and
         minority interest        (100,501)  (31,975)  (215,808)  (71,203)
     Income tax benefit
      (provision)                     (351)      (93)      (752)      116
     Minority interest                  --       265      1,048     1,136
                                 ---------- --------- ---------- ---------
           Net loss               (100,852)  (31,803)  (215,512)  (69,951)
     Less: Preferred stock
      dividends                     (6,862)       --    (13,814)       --
           Accretion of issuance
            costs on preferred
            stock                      (69)       --       (139)       --
                                 ---------- --------- ---------- ---------
            Net loss applicable
             to common shares    $(107,783) $(31,803) $(229,465) $(69,951)
                                 ---------- --------- ---------- ---------
    Net loss per common share -
     basic and diluted           $   (1.17) $  (0.39) $   (2.60) $  (0.86)
    Weighted average shares used
     in per share calculation       92,468    81,833     88,413    81,722
    

    
                            NEXTWAVE WIRELESS INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (in thousands) (unaudited)

                                                       Nine Months Ended
                                                     ---------------------
                                                     September  September
                                                         29,        30,
                                                        2007       2006
                                                     ---------- ----------
    OPERATING ACTIVITIES
    Net loss                                         $(215,512) $ (69,951)
    Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation                                        8,023      4,235
     Amortization of intangible assets                  15,418      3,752
     Non-cash share-based compensation                   8,157      3,548
     In-process research and development                12,060      1,648
     Accretion of interest expense                      15,647      4,643
     Minority interest                                  (1,048)    (1,136)
     Other non-cash adjustments                          2,626      2,387
     Changes in operating assets and liabilities:
      Accounts receivable                               (2,631)    (2,221)
      Inventory                                          1,143        (59)
      Deferred contract costs                          (16,546)    (2,116)
      Prepaid expenses and other current assets           (813)    (1,938)
      Other assets                                       2,123      1,336
      Accounts payable and accrued liabilities          (3,584)    11,604
      Deferred revenue                                  25,979      3,950
      Other current liabilities and deferred credits       219       (238)
                                                     ---------- ----------
          Net cash used in operating activities       (148,739)   (40,556)
                                                     ---------- ----------
    INVESTING ACTIVITIES
    Proceeds from maturities of available-for-sale
     securities                                         19,273    192,226
    Proceeds from the sale of available-for-sale
     securities                                        865,234    452,951
     Purchases of available-for-sale securities       (905,251)  (477,927)
     Payments for wireless spectrum licenses           (34,607)  (397,817)
    Cash paid for business combinations, net of cash
     acquired                                          (80,332)    (4,950)
    Purchase of property and equipment                 (22,422)   (10,990)
    Other, net                                            (500)    (1,866)
                                                     ---------- ----------
          Net cash used in investing activities       (158,605)  (248,373)
                                                     ---------- ----------
    FINANCING ACTIVITIES
    Proceeds from the sale of Series A Senior
     Convertible Preferred Stock, net of costs to
     issue                                             351,146         --
    Proceeds from long-term obligations, net of
     costs to issue                                         --    295,098
    Payment to restricted cash account securing
     long-term obligations                                  --    (75,000)
    Payments on long-term obligations                   (4,052)    (2,374)
    Proceeds from the sale of common equity
     interests                                           2,175      2,379
    Proceeds from investment by joint venture
     partner                                                --      1,995
    Cash distributions paid to members                  (2,034)    (1,447)
                                                     ---------- ----------
          Net cash provided by financing activities    347,235    220,651
                                                     ---------- ----------
      Net increase (decrease) in cash and cash
       equivalents                                      39,891    (68,278)
    Cash and cash equivalents, beginning of period      32,980     93,649
                                                     ---------- ----------
    Cash and cash equivalents, end of period         $  72,871  $  25,371
                                                     ---------- ----------
    

    About NextWave Wireless Inc.

    NextWave Wireless Inc. supplies a broad range of advanced mobile
broadband and wireless multimedia products and technologies to many of the
largest mobile device manufacturers, network equipment suppliers, and wireless
service providers in the world. NextWave's products include WiMAX/Wi-Fi
semiconductors, TD-CDMA mobile broadband systems, wide-area Wi-Fi networks,
and device-embedded multimedia software solutions. The company develops and
markets its products through its family of world-class operating companies
which include NextWave Broadband Inc., PacketVideo Corporation, IPWireless,
and GO Networks, Inc. NextWave's extensive portfolio of licensed spectrum
holdings include nationwide spectrum in the U.S., Canada, Germany,
Switzerland, Austria, Croatia, Czech Republic and Slovakia. The company
intends to make its spectrum available to customers of its advanced mobile
broadband products and solutions. NextWave Wireless is headquartered in San
Diego, California, U.S.A., and has offices in over a dozen countries. Visit
NextWave Wireless at www.nextwave.com.

    Note Regarding Forward-Looking Statements

    This press release contains "forward-looking statements" for purposes of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. There can be no assurances that forward-looking statements will
be achieved, and actual events or results could differ materially from the
events or results predicted by such statements. Important factors that could
cause actual events or results to differ materially are discussed in greater
detail in the filings of NextWave with the Securities and Exchange Commission.
All such documents are available through the SEC's website at www.sec.gov.
NextWave makes no commitment to update any forward-looking statements in order
to reflect subsequent changes in events or circumstances except as may be
required pursuant to applicable law.




For further information:

For further information: NextWave Wireless Inc. Media Michael Gury,
203-742-2535 mgury@nextwave.com or Investor Relations Roseann Rustici,
203-742-2539 rrustici@nextwave.com

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NEXTWAVE WIRELESS INC.

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