Business Profile
The company's strategy is to become the leading supplier
of high performance RF power amplifiers used in digital and
analog wireless networks worldwide. During the 1999
second quarter, it continued its focus on integrating 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 originally anticipated. The company used $22.8 million
of the $57.8 million proceeds of a March 1999 stock offering
to repay all of the bank debt incurred in connection with the
HP acquisition.
Operation Review
Revenues climbed 185% year to year in the first half of
1999, largely reflecting the inclusion of revenues from the
sale of products acquired in the HP acquisition in October
1998. Gross margins narrowed on increased labor and
overhead costs associated with operating the Folsom manufacturing facility acquired in the
HP acquisition, inefficiencies in the ramp-up of increased
production in the
company's Irvine facility, and a significant increase in
single carrier amplifiers. Other income was down sharply,
and net income was up 56%, to $6,254,000 ($0.31 a share,
diluted, on 12% more shares), from $4,086,000 ($0.24).
Business Summary
Powerwave Technologies (formerly Milcom International)
manufactures and markets ultra-linear radio frequency (RF)
poweramplifiers for use in the wireless communications
market. The company's RF power amplifiers, which are key
components of wireless communications networks, increase
the signal strength of wireless transmissions from the base
station to a handset while reducing interference, or "noise."
Less noise enables wireless service providers to deliver
clearer call connections. Stronger signals reduce the
number of interrupted or dropped calls.
The company manufactures both single and multi-carrier RF
power amplifiers for a variety of frequency ranges and
transmission protocols. Single carrier RF power amplifiers
typically amplify a specific call channel. Multi-carrier RF
power amplifiers are capable of amplifying several call
channels at one time and integrate the functions of several
RF power amplifiers and cavity filterswithin a single unit.
The company's products are currently being utilized in both
cellular and personal communications services (PCS) base stations in digital and analog-based
networks. The company sells most of its products to a
small number of customers, and expects that this will
continue. It believes
that its future success depends upon its ability to broaden
its customer base and maintain relationships with major
wireless original equipment manufacturers, or OEMs, such
as Hyundai, LGIC, Ericsson, Lucent, Nokia, Nortel and
Samsung, as well as major operators of wireless networks,
such as AT&T Wireless Services&T;, GTE Wireless and
BellSouth.
In October 1998, PWAV acquired Hewlett-Packard's RF
power amplifier business for about $65.9 million. As part of
this acquisition, it acquired HP's manufacturing and
research and development facility in Folsom, CA, and its
production equipment and manufacturing lines in Malaysia.
Subsequently, the company closed the Malaysian
manufacturing operations and relocated the production
equipment to its existing manufacturing facility in Irvine,
CA. In addition, it is currently consolidating the Folsom
manufacturing facility into its Irvine manufacturing facility.
PWAV intends to maintain a research and development
location in the Folsom area.
Courtesty of E-Trade.
Good Luck,
Eric |
