Powerwave Technologies Reports First Quarter Results
SANTA ANA, Calif. - May. 03, 2010 -
Powerwave Technologies, Inc. (NASDAQ:PWAV), a global supplier of end-to-end solutions for wireless communications networks, today reported preliminary results for its first quarter ended April 4, 2010.
Net sales in the first quarter of fiscal 2010 were $114.5 million, compared with $149.7 million in the first quarter of fiscal 2009. Powerwave also reported a first quarter GAAP net loss of $10.8 million, which includes $0.4 million of restructuring and impairment charges and $0.8 million of non-cash debt discount amortization net of a gain on the exchange of outstanding long-term debt. For the first quarter of 2010, the net loss equates to a basic loss per share of 8 cents. This compares to a net loss of $4.4 million, or a loss per share of 3 cents for the prior year period. For the first quarter of fiscal 2010, excluding the restructuring and impairment charges, debt discount amortization and the gain on the exchange of outstanding long-term debt, on a pro forma basis, Powerwave would have reported a net loss of $7.1 million, or basic loss per share of 5 cents.
"The first quarter was impacted by significant supply-chain constraints that resulted in delayed shipments during the quarter which reduced our revenues,” stated Ronald Buschur, President and Chief Executive Officer of Powerwave Technologies. “Looking ahead, we continue to believe that there are signs of an improving global economy and increasing North American wireless capital spending for the remainder of 2010. While we are continuing to face long lead times for certain electronic components that may impact our growth, we do believe that Powerwave is in an excellent position to build upon and capture the long-term growth opportunities in the wireless infrastructure marketplace."
Summary of Significant Items impacting the First Quarter
During the first quarter of 2010, we incurred total restructuring and impairment charges of $0.4 million, which primarily included severance charges related to personnel reductions and site closure expenses.
In addition, during the first quarter of 2010 we entered into privately negotiated exchange agreements under which we exchanged $60 million in aggregate principal of our outstanding 1.875% Convertible Subordinated Notes due 2024 (“Existing Notes”) for $60 million in aggregate principal of new 1.875% Convertible Senior Subordinated Notes due 2024. The new 1.875% Convertible Senior Subordinated Notes extend the first put date available to holders from November 15, 2011 to November 15, 2013. Following the exchange transactions, we had outstanding approximately $70.9 million of the Existing Notes and $60 million of the new 1.875% Convertible Senior Subordinated Notes, as well as $150 million of the 3.875% Convertible Subordinated Notes due 2027. These exchange transactions resulted in a one-time non-cash gain on the exchange of debt of approximately $0.5 million. Pursuant to FASB Accounting Standards Codification (ASC) Topic 470-20, the Existing Notes incurred approximately $1.3 million of amortization of non-cash debt discount during the first quarter of 2010, which is reflected in interest expense for the quarter.
During the first quarter of 2009, the Company repurchased a total of $5.4 million par value of the Existing Notes, resulting in a gain of $3.4 million. The amortization of the non-cash debt discount during the first quarter of 2009 was approximately $1.7 million.
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