QCOM (Nasdaq 659 up 156 today) supplies parts and components for the wireless/cellular industry. Below is what MWAV does (taken from 3/30/99 10-k). MWAV closed today at 2 7/8 up 3/8 .
Obviously the two are not the exactly the same...however, there are similarities. And the forecast made by the company in the release contained in the prior post was made a couple of months ago...before all this QCOM hoopla. Sometimes things are very easy in this market...to me this is 2+2. I have a few other micro cap infrastructure suppliers to the wireless industry that are just beginning to move a bit. MWAV should do well.
gpg
M~Wave, Inc., operates through its wholly-owned subsidiaries Poly Circuits, Inc.
and P C Dynamics Corporation (collectively, the "Company"). In December 1997,
the Company announced that the P C Dynamics subsidiary does not have a place in
the Company's strategic plans and the Company will eventually exit the Military
market and concentrate all efforts in the Commercial market segments. The
Company manufactures printed circuit boards using Teflon-based laminates to
customers' specifications. In addition, the Company produces customer specified
bonded assemblies consisting of a printed circuit board bonded in some manner to
a metal carrier or pallet. One bonding technique used by the Company is
Flexlink(TM), a patented process granted to the Company in 1993.
The Company's printed circuit boards and bonded assemblies are used in wireless
communication systems and other devices and equipment operating in the microwave
frequency spectrum of 800 MHz and above. These devices and equipment include
cellular telephones, direct broadcast satellite television, global positioning
satellite systems, personal communication networks and military "smart" weapons.
The Teflon(TM) based boards and assemblies are advantageous for microwave
systems because of their extremely low circuit transmission and power losses,
coupled with stable, predictable electrical characteristics.
The production of Teflon(TM) based printed circuit boards and bonded assemblies
is technologically demanding due to the precise requirements of their end-use
applications and the miniaturization of the microwave frequency components. To
meet these technological demands, the Company has developed manufacturing
processes and designs which reduce the cost and increase the manufacturability
and reliability of customer systems. Additionally, the Company emphasizes
quality engineering and design support for its customers. The Company is subject
to stringent technical evaluation and certification by many of its customers.
The Company markets its products through Company personnel supported by
approximately 20 independent sales organizations. The Company's base of
approximately 125 customers represents a highly sophisticated group of
purchasers.
Segments within the commercial markets have experienced growth in recent years
due to: (i) increased efficiency of microwave systems; (ii) a commercial market
based upon increasing acceptance of microwave frequency products; (iii) a
continuing need to upgrade systems based upon microwave technology; and (iv)
crowding of the available frequency spectrum below 800 MHz. The Company's
strategy is to increase sales of its commercial products to support the growth
of its customers in these industry segments.
M~Wave, Inc. was incorporated in Delaware in January 1992 in connection with a
100 for 1 share exchange with the former stockholders of Poly Circuits, Inc. The
Company's executive offices are located at 216 Evergreen Street, Bensenville,
Illinois, 60106, and its telephone number is (630) 860-9542.
Industry and Market
There are Commercial and Military-related types of customers within the market
for microwave related printed circuit boards and bonded assemblies. Within both
customer types there has been an "outsourcing" trend whereby end users have
gotten out of internal
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production of printed circuit boards and bonded assemblies and moved to buying
these products from "contract manufacturing" board shops. The market for
microwave related printed circuit boards and bonded assemblies is expected to
grow as wireless communication systems are expanded and improved. Although new
growth will occur, pricing pressures will also grow thereby depressing margins
for printed circuit board manufacturers.
One of the most widely recognized high frequency wireless communication systems
in commercial use is the cellular telephone. Cellular systems operate at the
lower end of the microwave spectrum and use Teflon(TM) based printed circuit
boards and bonded assemblies in signal amplification base assemblies. As
cellular telephones increase their market penetration, additional cellular base
stations will be constructed to improve geographic coverage and system capacity.
Approximately 51%, 49% and 39% of the Company's revenues in 1998, 1997, and
1996, respectively, were related to the cellular telephone industry.
Customers and Marketing
The Company's customers include microwave system manufacturers with
sophisticated technologies. The Company currently services a customer base of
approximately 125.
The sale of microwave printed circuit boards is technical in nature. The Company
works with customer personnel who are frequently experts in microwave design and
theory with added expertise in fabrication and design techniques for printed
circuit boards. Typically, microwave system manufacturers provide the Company
fabrication details and guidelines. The Company fabricates the products to
customer specifications. For military microwave system manufacturers, the
Company must meet the demanding military and critical weapon specifications.
The Company has adopted a program of early supplier involvement as part of its
sales strategy. The Company has the opportunity to design-in its manufacturing
processes as a means of reducing the cost of microwave systems. The emphasis
upon a partnership underlies the Company's relationship with its customers.
Approximately 20 independent sales organizations are paid a commission to
represent the Company in geographical territories. International sales of the
Company's products have accounted for less than 5% of revenues in each of 1998,
1997 and 1996.
In 1998, Motorola, Lucent and Spectrian accounted for 7%, 9% and 37%,
respectively, of the Company's revenues. In 1997, Motorola, Lucent and Spectrian
accounted for 19%, 7% and 26%, respectively, of the Company's revenues. In 1996,
Motorola, Lucent and Spectrian accounted for 26%, 8% and 10%, respectively, of
the Company's revenues. The loss of, or a substantial reduction in or change in
the mix of orders from, any one or more of the Company's major customers could
have a material adverse effect on the Company's results of operations and
financial condition. The Company continues vigorously to pursue a strategy of
being a major source to its customers, but intends to seek to be one of a few
key suppliers rather than the sole supplier. |
