Powerwave Technologies Reports Third Quarter Results
IRVINE, Calif. - Oct. 11, 2001 -
Powerwave Technologies, Inc. (NASDAQ:PWAV) today reported net sales of $64.7 million for its third quarter ended September 30, 2001, compared to third quarter fiscal 2000 revenues of $111.9 million. Powerwave also reported a third quarter net loss of $5.0 million, or a basic loss per share of 8 cents for its fiscal third quarter, compared to net income of $11.6 million, or diluted earnings per share of 18 cents per share reported for the third quarter fiscal 2000.
"We continue to be impacted by the global economic recession which has been contributing to the slowdown in the wireless communications sector which is continuing to see delays in wireless infrastructure spending," stated Bruce C. Edwards, President and Chief Executive Officer. "During this difficult economic environment, our focus has remained on building and expanding both our customer base and product lines while strengthening our balance sheet."
"For the third quarter, we further expanded our customer base with the addition of two new 10 percent customers, ALLTEL Corporation and Nokia Networks. On the product front, we began production shipments of our new high-powered PCS multi-carrier amplifier. Our revenues from all PCS amplifiers totaled $13.6 million in the third quarter, representing an increase of $5.5 million or 68% from the second quarter of fiscal 2001. In addition, we continued to demonstrate strength in our newest product area, amplifiers for the emerging 3G W-CDMA market, which accounted for approximately 27% of our third quarter revenues."
North American revenues were $40.3 million or approximately 62% of revenues for the third quarter of 2001, as compared to $83.3 million or approximately 74% of revenues for the third quarter of 2000. Total sales to customers based in Asia accounted for approximately 2% of revenues or $1.1 million for the third quarter of 2001. This compares to 13% of revenues or $14.9 million for the third quarter of 2000. Total European and other international revenues for the third quarter of 2001 were $23.3 million or approximately 36% of revenues as compared to $13.7 million or approximately 12% of revenues for the third quarter of 2000.
Powerwave's customer diversification for the third quarter of 2001 includes ALLTEL Corporation, Cingular Wireless and Nokia Networks, each accounting for 10% or more of revenues, and Nortel Networks Corporation accounting for approximately 50% of revenues. In addition, our total sales to network operators accounted for approximately 27% of revenues during the third quarter of 2001.
Balance Sheet
At September 30, 2001, Powerwave had total cash and cash equivalents of approximately $108.1 million, which is an increase of approximately $9 million for the quarter. Total assets were approximately $353.1 million with net accounts receivable of $54.9 million. In addition, during the third quarter Powerwave reduced net inventories by approximately $17 million to $44.0 million at September 30, 2001 from $61.1 million at July 1, 2001.
Company Background
Powerwave Technologies, Inc., a TL 9000 and 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 for use in cellular, PCS and 3G base stations throughout the world. Corporate headquarters are located at 1801 E. St. Andrew Place, Santa Ana, Calif. 92705. Telephone (714) 466-1000. For more information on Powerwave's high performance ultra-linear RF power amplifiers and amplifier systems, please call (888)-PWR-WAVE (797-9283) or visit our web site at www.powerwave.com. Powerwave and Powerwave Technologies are registered trademarks of Powerwave Technologies, Inc. and the Powerwave logo is a trademark of Powerwave Technologies, Inc.
Conference Call
Powerwave is providing a simultaneous Webcast of its Fiscal 2001 third quarter financial results conference call on Thursday, October 11, 2001, at 2:00 PM Pacific Time. To access this audio webcast, log onto www.companyboardroom.com and select conference calls. Then select the Powerwave Technologies Q3 Earnings Call. The call will last for approximately 1 hour. A replay of the Webcast will be available beginning approximately 1 hour after completion of the initial Webcast . Additionally, an audio playback of Powerwave's financial results conference call will be available beginning at approximately 4:00pm PDT on October 11, 2001 through October 18, 2001 by calling (800) 633-8284 or (858) 812-3440 and entering reservation number 19811358.
Forward-Looking Statements
The foregoing statements regarding growth possibilities associated with the expansion of our customer base; the deployment of 3G systems; the demand for high-powered PCS multi-carrier amplifiers; and the possibility of delays in deployments of 2G and 3G wireless networks are "forward looking statements." All of these statements are subject to risks and uncertainties which could cause our actual results to differ materially from those projected or implied. Such potential risks and uncertainties include, but are not limited to, in no particular order: delays in deployment of 3G systems by wireless OEM's and delays in acceptance of 3G systems by network operators; unexpected technical difficulties in developing 3G products; delays and or reductions in demand for high-powered PCS multi-carrier products; we require continued success in the design of new amplifier products and such products must be manufacturable and of good quality and reliability; our dependence on single source suppliers for certain key components used in our amplifiers exposes us to potential material shortages; variability in our gross margins on new products which could result in a negative impact on our operating results; the ramp up of new production lines incurs many additional costs and if customer demand for such new products is not large enough, such costs may have a negative impact on our operating results; our business requires continued favorable business conditions and growth in the wireless communications market. Powerwave also notes that its reported financial performance, balance sheet comparisons and period to period revenue and operating performance comparisons are not necessarily indicative of the results that may be expected in the future and Powerwave believes that such comparisons cannot be relied upon as indicators of future performance. Powerwave also notes that the market price of its Common Stock has exhibited high levels of volatility and therefore may not be suitable for all investors. More detailed information on these and additional factors which could affect Powerwave's operating and financial results are described in the Company's Form 10-K for the fiscal year ended December 31, 2000 and the Company's Form 10-Q for the period ended July 1, 2001, 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 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. Additionally, Powerwave 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 OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2001 2000 2001 2000
Net Sales $64,667 $111,877 $215,891 $326,190
Cost of Sales 60,147 75,337 196,440 221,238
Gross Profit 4,520 36,540 19,451 104,952
Operating Expenses:
Sales and Marketing 2,565 5,122 11,143 15,569
Research and Development 7,719 11,009 26,975 30,644
General and Administrative 2,920 3,980 12,504 11,188
Total Operating Expenses 13,204 20,111 50,622 57,401
Operating Income (Loss) (8,684) 16,429 (31,171) 47,551
Other Income, net 895 1,529 4,773 4,072
Income (Loss) before
Income Taxes (7,789) 17,958 (26,398) 51,623
Provision (Benefit)
for Income Taxes (2,804) 6,375 (9,503) 18,326
Net Income (Loss) ($4,985) $11,583 ($16,895) $33,297
Net Income (Loss) per Share
(diluted): ($.08) .18 ($.27) $.52
(basic): ($.08) $.19 ($.27) $.55
Weighted Average Common
Shares used in Computing
per Share Amounts (diluted): 64,38 65,402 64,048 64,823
(basic): 64,386 62,230 64,048 61,499
POWERWAVE TECHNOLOGIES, INC.
Percentage of Net Sales
(unaudited)
Three Months Ended Six Months Ended
(unaudited) (unaudited)
Sept. 30, Oct. 1, Sept. 30, Oct. 1
2001 2000 2001 2000
Statement of Operations Data:
Net Sales 100.0% 100.0% 100.0% 100.0%
Cost of Sales 93.0 67.3 91.0 67.8
Gross Profit 7.0 32.7 9.0 32.2
Operating Expenses:
Sales and Marketing 4.0 4.6 5.7 4.8
Research and Development 11.9 9.8 12.5 9.4
General and Administrative 4.5 3.6 5.8 3.4
Total Operating Expenses 20.4 18.0 23.4 17.6
Operating Income (Loss) (13.4) 14.7 (14.4) 14.6
Other Income, Net 1.4 1.4 2.2 1.2
Income (Loss) before
Income Taxes (12.0) 16.1 (12.2) 15.8
Provision (Benefit) for
Income Taxes (4.3) 5.7 (4.4) 5.6
Net Income (Loss) (7.7)% 10.4% (7.8)% 10.2%
POWERWAVE TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
Sept. 30, 2001 Dec. 31, 2000
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 108,097 $128,733
Accounts receivable, net 54,879 80,006
Inventories, net 43,956 51,275
Other current assets 10,307 13,966
Total Current Assets 217,239 273,980
Property, plant and equipment, net 105,459 101,658
Other assets 30,447 18,159
Total Assets $353,145 $393,797
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 22,900 $ 50,829
Accrued expenses and other liabilities 16,713 24,023
Income taxes payable 2,273 2,299
Current portion of long-term debt 36 96
Total Current Liabilities 41,922 77,247
Long-term debt 33 42
Other non-current liabilities 66 236
Total Liabilities 42,021 77,525
Shareholders' Equity:
Total Shareholders' Equity 311,124 316,272
Total Liabilities and Shareholders' Equity $353,145 $393,797
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