Powerwave Technologies Reports Second Quarter Results
IRVINE, Calif.--(BUSINESS WIRE)--July 15, 1999--Powerwave
Technologies Inc. (NASDAQ:PWAV) Thursday reported net sales of $68.5
million for its second quarter ended July 4, 1999, representing an
increase of 225% from second quarter fiscal 1998 revenues of $21.1
million.
This represents the largest quarterly revenues in Powerwave's
history. For the first six months of fiscal 1999, Powerwave reported
total revenues of $124.5 million, which represents an increase of 185%
from the first six months of 1998 revenues of $43.7 million. Powerwave
also reported second quarter net income of $4.2 million, or diluted
earnings per share of 20 cents for its fiscal second quarter, compared
with net income of $1.9 million, or diluted earnings per share of 11
cents for the prior year period.
"We are very pleased with our second quarter results and the
demand we have seen for both our single carrier and multi-carrier
products," stated Bruce C. Edwards, president and chief executive
officer. "During the second quarter, Powerwave recorded record
revenues totaling $68.5 million, with 72% of our revenues coming from
customers in North America. During the quarter we continued our focus
on the integration of the October 1998 acquisition of
Hewlett-Packard's RF power amplifier business, while operating the
acquired manufacturing facility in Northern California at a higher
rate than we had originally anticipated. We also proceeded with the
process of transferring various manufacturing lines to our facility in
Southern California along with expanding our Southern California
manufacturing organization. We believe that our focus on meeting
customer expectations has enabled us to increase our second quarter
revenues and further establish Powerwave as the leader in the RF power
amplifier market."
For the second quarter of 1999, North American revenues were
$49.0 million or approximately 72% of revenues as compared with $14.0
million or approximately 66% of revenues for the second quarter of
1998. Total sales to customers based in Asia accounted for
approximately 17% of revenues or $11.8 million for the second quarter
of 1999. This compares with 32% of revenues or $6.7 million for the
second quarter of 1998. Total international revenues for the second
quarter of 1999 were $19.5 million or approximately 28% of revenues as
compared with $7.1 million or approximately 34% of revenues for the
second quarter of 1998. Powerwave believes that the effects of its
ongoing customer diversification strategy were demonstrated as Nortel
Networks Corp. accounted for approximately 44% of revenues and Lucent
Technologies Inc. accounted for over 10% of revenues for the second
quarter of 1999.
Balance Sheet
At July 4, 1999, Powerwave had total cash and cash equivalents of
approximately $59.2 million, with total assets of approximately $178.3
million. Net inventories were $20.2 million at July 4, 1999, compared
with $30.6 million at April 4, 1999. Net accounts receivable at July
4, 1999 were $41.5 million.
Company Background
Powerwave Technologies, an ISO 9001 quality certified company, is
a leading supplier of high performance RF power amplifiers for use in
wireless communications networks. Powerwave designs, manufactures and
markets both single carrier and multi-carrier RF power amplifiers.
Powerwave's products are utilized in both cellular and PCS base
stations in both digital and analog networks. Powerwave also produces
RF power amplifiers for the wireless local loop market.
Corporate headquarters are located at 2026 McGaw Ave., Irvine,
92614. Telephone: 949/757-0530. For more information on
Powerwave's high performance ultra-linear RF power amplifiers and
amplifier systems, call 888/PWR-WAVE (797-9283) or visit the company's
Web site at www.Powerwave.com.
Conference Call
A playback of Powerwave's second quarter financial results
conference call will be available beginning at approximately 4 p.m.
PDT on July 15, 1999 through July 19, 1999 by calling 800/633-8284 or
619/812-6440 and entering reservation number 12699793.
Forward-Looking Statements
Statements contained in this news release which are not
historical information are forward-looking statements as defined
within the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties
which could cause actual results to differ materially from those
projected or implied. Such potential risks and uncertainties include,
but are not limited to: dependence on a limited number of customers;
reductions or cancellations in orders from new or existing customers;
risks in completing the consolidation of the manufacturing facility
acquired from Hewlett-Packard Co. into the company's Irvine
manufacturing facility and possible inability or delays in achieving
re-qualification from customers of products previously manufactured by
Hewlett-Packard Co.; increased operating costs due to consolidation of
additional facilities and the costs of operating multiple
manufacturing facilities; continued or new deterioration of business
and economic conditions in the company's customers' marketplaces,
including international marketplaces such as South Korea and South
America; intensely competitive industry with increasing price
competition and resulting negative impact on gross margins;
variability in gross margins on new products and resulting impacts on
operating results; continued success in the design of new amplifier
products and the ability to manufacture in quantity such new products;
success in the redesign of existing amplifier products and the ability
to manufacture in quantity such redesigned products at a reasonable
cost basis; continued favorable business conditions and growth in the
wireless communications market; possible slowdown in demand during the
fourth quarter of 1999 due to concerns related to the Year 2000
computer problems; and dependence on certain suppliers for
single-sourced components.
The company also notes that its reported financial performance
and customer orders are not necessarily indicative of the results that
may be expected in the future and the company believes that such
comparisons cannot be relied upon as indicators of future performance.
More detailed information on these and additional factors which could
affect the company's operating and financial results are described in
the company's Form 10-K for the fiscal year ended Jan. 3, 1999 and
the company's Form 10-Q for the quarterly period ended April 4, 1999,
both of which are filed with the Securities and Exchange Commission,
and other risks detailed from time to time in the company's reports
filed or to be filed with the Securities and Exchange Commission.
Powerwave urges all interested parties to read these reports to gain a
better understanding of the many business and other risks that the
company faces. Due to the foregoing factors, the company believes that
period-to-period comparisons of its operating results are not
necessarily meaningful and that such comparisons cannot be relied upon
as indicators of future performance. Additionally, the company
undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to
reflect events or circumstances occurring after the date hereof or to
reflect the occurrence of unanticipated events.
POWERWAVE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
(unaudited) (unaudited)
July 4, June 28, July 4, June 28,
1999 1998 1999 1998
Net Sales $68,493 $21,099 $124,517 $43,749
Cost of Sales 50,353 12,567 91,363 26,362
Gross Profit 18,140 8,532 33,154 17,387
Operating Expenses:
Sales and Marketing 3,411 2,164 6,989 4,195
Research and
Development 6,376 2,950 11,671 5,907
General and
Administrative 2,654 1,204 5,345 2,440
Total Operating
Expenses 12,441 6,318 24,005 12,542
Operating Income 5,699 2,214 9,149 4,845
Other Income 919 745 700 1,590
Income before Income
Taxes 6,618 2,959 9,849 6,435
Provision for Income
Taxes 2,416 1,080 3,595 2,349
Net Income $4,202 $1,879 $6,254 $4,086
Net income per share
(diluted): $.20 $.11 $.31 $.24
(basic): $.21 $.11 $.32 $.24
Weighted average common shares used in
computing per share amounts
(diluted): 20,500 17,466 19,542 17,410
(basic): 19,867 17,140 18,936 17,138
POWERWAVE TECHNOLOGIES INC.
Percentage of Net Sales
(unaudited)
Three Months Ended Six Months Ended
July 4, June 28, July 4, June 28,
1999 1998 1999 1998
Statement of Operations Data:
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 73.5 59.6 73.4 60.3
Gross Profit 26.5 40.4 26.6 39.7
Operating Expenses:
Sales and Marketing 5.0 10.2 5.6 9.5
Research and Development 9.3 14.0 9.4 13.5
General and
Administrative 3.9 5.7 4.3 5.6
Total Operating Expenses 18.2 29.9 19.3 28.6
Operating Income 8.3 10.5 7.3 11.1
Other Income 1.3 3.5 0.6 3.6
Income before Income
Taxes 9.7 14.0 7.9 14.7
Provision for Income
Taxes 3.5 5.1 2.9 5.4
Net Income 6.1% 8.9% 5.0% 9.3%
POWERWAVE TECHNOLOGIES INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
July 4, 1999 Jan. 3, 1999
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents $ 59,241 $ 13,307
Accounts receivable, net 41,543 31,212
Inventories, net 20,248 28,583
Other current assets 13,461 4,936
Total Current Assets 134,493 78,038
Property and equipment, net 23,219 20,448
Other assets 20,619 33,499
Total Assets $178,331 $131,985
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 18,463 $ 18,667
Accrued expenses and other
liabilities 14,855 13,918
Income taxes payable 2,941 3,715
Current portion of long-term debt 392 6,528
Total Current Liabilities 36,650 42,828
Long-term debt -- 17,621
Other non-current liabilities 531 466
Total Liabilities 37,182 60,915
Shareholders' Equity:
Common Stock $.0001 par value 106,166 65,027
Retained earnings 34,983 28,729
Less treasury stock at cost -- (22,686)
Total Shareholders' Equity 141,149 71,070
Total Liabilities and Shareholders'
Equity $178,331 $131,985
CONTACT:
Powerwave Technologies Inc., Irvine
Kevin Michaels, 949/757-6608
KEYWORD: CALIFORNIA
BW0422 JUL 15,1999
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