Powerwave Technologies Reports Second Quarter Results.SANTA ANA Santa Ana, city, El Salvador Santa Ana (sän'tä ä`nä), city (1993 pop. 129,873), W El Salvador. It is the second largest city in the country and the commercial and processing center for a sugarcane, coffee, and cattle region. , Calif. -- Powerwave Technologies Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :PWAV) today reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $186.3 million for its second quarter ended July July: see month. 3, 2005, compared to second quarter fiscal 2004 revenues of $116.0 million. Powerwave also reported second quarter net income of $13.0 million, which includes a total of $3.7 million of acquisition-related intangible asset Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. amortization. The net income equates to diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 11 cents for the second quarter, and a basic earnings per share of 13 cents for the same period. This compares to a net loss of $30.2 million, or a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share of 33 cents for the prior year period. Powerwave completed the acquisition of LGP LGP Linux Game Publishing LGP Low Ground Pressure LGP Local Governance Program (Iraq) LGP LG.Philips LGP Lysosomal Membrane Glycoprotein LGP Linux Global Partners LGP Left-Green Alliance (Iceland) Allgon Holding AB during the second quarter of 2004 and, therefore, the results reported herein include the results of LGP Allgon Holding AB for the entire second quarter of fiscal year 2005, but only include the months of May and June June: see month. 2004 in the second quarter of 2004. For the second quarter of fiscal 2005, excluding the acquisition-related intangible asset amortization, Powerwave would have reported operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $14.8 million, net income after taxes of $16.4 million and diluted earnings per share of 14 cents. For the first six months of fiscal 2005, Powerwave reported total net sales of $348.5 million compared with $179.2 million for the first six months of fiscal 2004. The first six months of 2005 include the results of LGP Allgon for the entire period while the first six months of 2004 only include the results of LGP Allgon for May and June 2004. Powerwave also reported total net income for the first six months of fiscal 2005 of $18.4 million, or diluted earnings per share of 16 cents, compared to a net loss of $33.4 million or a basic and diluted loss per share of 43 cents for the first six months of fiscal 2004. The results for the first six months of 2005 include $8.0 million of acquisition-related charges and expenses, and the results for the first six months of 2004 include $29.7 million of acquisition- and restructuring-related charges and expenses. "For our second quarter, we are proud to report sequential One after the other in some consecutive order such as by name or number. quarterly revenue and income growth and, once again, a record revenue quarter for Powerwave," stated Ronald Buschur, president and chief executive officer of Powerwave Technologies. "As we stated previously, we believe that we are off to a strong start for 2005 and we are very excited about the increased demand we are experiencing within the wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. infrastructure industry. While we continue to work to improve the synergies of our global organization, we are poised to build upon our market-leading position and product portfolio with the pending acquisition of the selected assets of REMEC's Wireless business. We believe that the addition of REMEC's wireless product portfolio to Powerwave's existing suite of global wireless infrastructure products and services will further enhance our leadership position in both the OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and direct-to-operator markets." For the second quarter of 2005, total Americas A·mer·i·cas , the See America. revenues were $58.9 million or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 32% of revenues, as compared to $41.7 million or approximately 36% of revenues for the second quarter of 2004. Total sales to customers based in Asia accounted for approximately 10% of revenues or $19.0 million for the second quarter of 2005, compared to 11% of revenues or $13.1 million for the second quarter of 2004. Total Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Africa and Middle East revenues for the second quarter of 2005
were $108.4 million or approximately 58% of revenues, as compared to
$61.1 million or approximately 53% of revenues for the second quarter of
2004.For the second quarter of 2005, sales of antenna systems totaled $49.5 million or 27% of total revenues, base station systems sales totaled $104.5 million or 56% of revenues, coverage systems sales totaled $20.5 million or 11% of revenues, and contract manufacturing accounted for $11.8 million or 6% of total revenues for the second quarter. For the second quarter of 2005, Powerwave's largest customers included Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). , which accounted for approximately 18% of revenues, and Cingular Wireless, Nokia Nokia (nō`kēä), town (1996 pop. 26,326), Western Finland prov., SW Finland, on Lake Näsijärvi. It is an industrial community where wood and rubber products are manufactured. , and Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony , each of which individually accounted for over 10% of revenues. In terms of customer profile for the second quarter of 2005, our total OEM sales accounted for approximately 48% of total revenues, total direct and operator sales accounted for approximately 46% of revenues, and contract manufacturing accounted for 6% of revenues for the quarter. Balance Sheet At July 3, 2005, Powerwave had total cash and cash equivalents of $284.0 million, which includes restricted cash of $6.5 million. Total net inventories were $60.0 million and net accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying were $171.2 million. Non-GAAP Financial Information This press release includes certain non-GAAP financial information as defined by the U.S. Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, a reconciliation of this non-GAAP financial information to our financial statements as prepared under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) is included in this press release. Powerwave's management believes that the presentation of this non-GAAP financial information is useful to our investors and the investment community since it excludes certain non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and expenses arising from the acquisitions of LGP Allgon and Kaval The kaval [kaˈval] is a chromatic end-blown flute traditionally played throughout Azerbaijan, Turkey, Bulgaria, Republic of Macedonia, Kosovo / Albania (Kavall), northern Greece (Kavali or Dzhamara), southern Romania Wireless, including restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and the amortization of certain intangible assets resulting from the purchase accounting valuation of both LGP Allgon and Kaval Wireless. Management of Powerwave believes that these items should be excluded when comparing our current operating results with those of prior periods as the restructuring charge will not impact future operating results, and the amortization of intangible assets is a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) . Company Background Powerwave Technologies Inc., is a global supplier of end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. wireless solutions for wireless communications networks. Powerwave designs, manufactures and markets antennas, boosters, combiners, filters, repeaters, multi-carrier RF power amplifiers An RF power amplifier is a type of electronic amplifier used to convert a low-power radio-frequency signal into a larger signal of significant power, typically for driving the antenna of a transmitter. and tower-mounted amplifiers and advanced coverage solutions, all for use in cellular, PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. and 3G networks throughout the world. Corporate headquarters are located at 1801 E. St. Andrew Place, Santa Ana, CA 92705. For more information on Powerwave's advanced wireless coverage and capacity solutions, please call 888-PWR-WAVE (797-9283) or visit our Web site at www.powerwave.com. Powerwave, Powerwave Technologies and the Powerwave logo are registered trademarks of Powerwave Technologies Inc. Attached to this news release are preliminary unaudited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the second quarter ended July 3, 2005. Conference Call Powerwave is providing a simultaneous webcast and live dial-in number of its second quarter fiscal 2005 financial results conference call on Thursday Thursday: see week. , July 28, 2005, at 2 p.m. Pacific time. To access this audio webcast, select the Investor Relations Investor relations The process by which the corporation communicates with its investors. page at www.powerwave.com and select the Powerwave Technologies second quarter conference call. The call will last for approximately one hour. To listen to the live call, please call 617-213-8859 and enter reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 39043141. A replay of the webcast will be available beginning approximately two hours after completion of the initial webcast. Additionally, an audio playback Playback could mean:
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The foregoing statements regarding experiencing increasing demand in the wireless communications infrastructure industry and the ability to further enhance our leadership position in both the OEM and direct to operator markets due to the potential acquisition of REMEC's Wireless business are both "forward-looking statements." These statements are subject to numerous risks and uncertainties which could cause our actual results to differ materially from those projected or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. . Such potential risks and uncertainties include, but are not limited to, in no particular order: delays or cancellations of wireless network capacity expansions and buildouts for both existing 2G and 2.5G networks and new 3G networks; we require continued success in the design of new wireless infrastructure products and such products must be manufacturable and of good quality and reliability; delays or failure to close the proposed REMEC Wireless acquisition; the inability to realize anticipated costs savings and synergies from the proposed acquisition of REMEC Wireless; difficulties integrating the REMEC Wireless business; our dependence on single source suppliers for certain key components used in our products exposes us to potential material shortages; our business requires continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. business conditions and growth in the wireless communications market. Powerwave also notes that its reported financial performance and period to period comparisons are not necessarily indicative indicative: see mood. 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended Jan. 2, 2005, the Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended April 3, 2005, 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 ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to these forward-looking statements which may be made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events.
POWERWAVE TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
(unaudited) (unaudited)
July 3, July 4, July 3, July 4,
2005 2004 2005 2004
Net sales $186,334 $115,981 $348,513 $179,205
Cost of sales:
Cost of goods 136,857 92,121 255,893 144,524
Intangible asset
amortization 1,820 1,078 3,741 1,125
Restructuring and impairment
charges - 506 - 506
Total cost of sales 138,677 93,705 259,634 146,155
Gross profit 47,657 22,276 88,879 33,050
Operating expenses:
Sales and marketing 9,150 6,386 18,644 9,854
Research and development 15,425 13,053 30,054 22,334
General and administrative 10,079 5,807 18,694 9,490
Intangible asset
amortization 1,875 1,769 3,861 1,769
In-process research and
development - 23,450 350 23,450
Restructuring and impairment
charges - 2,001 - 2,001
Total operating expenses 36,529 52,466 71,603 68,898
Operating income (loss) 11,128 (30,190) 17,276 (35,848)
Other income (expense) 2,919 (15) 3,152 336
Income (loss) before income
taxes 14,047 (30,205) 20,428 (35,512)
Provision (benefit) for income
taxes 1,033 (43) 2,043 (2,086)
Net income (loss) $13,014 $(30,162) $18,385 $(33,426)
Earnings (loss) per share
- basic: $.13 ($.33) $.18 ($.43)
- diluted:(1) $.11 ($.33) $.16 ($.43)
Weighted average common
shares used in computing
per share amounts
- basic: 99,734 91,664 99,654 77,528
- diluted: 131,908 91,664 131,590 77,528
(1) Diluted earnings per share include the add back of interest
expense costs associated with the assumed conversion of the
company's outstanding convertible subordinated notes, which
on a pre-tax basis equals approximately $1.8 million for the
second quarter 2005 and approximately $3.5 million for the
first six months of 2005. The second quarter 2004 and first
six months of 2004 loss per share does not include an add
back as that would be anti-dilutive.
POWERWAVE TECHNOLOGIES INC.
PERCENTAGE OF NET SALES
Three Months Ended Six Months Ended
(unaudited) (unaudited)
July 3, July 4, July 3, July 4,
2005 2004 2005 2004
Statement of Operations Data:
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales:
Cost of goods 73.4 79.4 73.4 80.7
Intangible asset
amortization 1.0 0.9 1.1 0.6
Restructuring and impairment
charges - 0.5 - 0.3
Total cost of sales 74.4 80.8 74.5 81.6
Gross profit 25.6 19.2 25.5 18.4
Operating expenses:
Sales and marketing 4.9 5.5 5.3 5.5
Research and development 8.3 11.3 8.6 12.5
General and administrative 5.4 5.0 5.4 5.3
Intangible asset
amortization 1.0 1.5 1.1 1.0
In-process research and
development - 20.2 0.1 13.1
Restructuring and impairment
charges - 1.7 - 1.1
Total operating expenses 19.6 45.2 20.5 38.5
Operating income (loss) 6.0 (26.0) 5.0 (20.1)
Other income 1.6 - 0.9 0.2
Income (loss) before income
taxes 7.6 (26.0) 5.9 (19.9)
Provision (benefit) for income
taxes 0.6 - 0.6 (1.2)
Net income (loss) 7.0% (26.0%) 5.3% (18.7%)
POWERWAVE TECHNOLOGIES INC.
CONSOLIDATED STATEMENT OF OPERATIONS
RECONCILIATION OF PRO FORMA RESULTS
(in thousands, except per share amounts)
Three Months Ended
(unaudited) Pro Forma
July 3, July 3,
2005 Adjustments 2005
Net sales $186,334 $186,334
Cost of sales:
Cost of goods 136,857 136,857
Intangible asset amortization 1,820 (1,820)(1) -
Total cost of sales 138,677 (1,820) 136,857
Gross profit 47,657 1,820 49,477
Operating expenses:
Sales and marketing 9,150 9,150
Research and development 15,425 15,425
General and administrative 10,079 10,079
Intangible asset amortization 1,875 (1,875)(2) -
In-process R&D - - (3) -
Total operating expenses 36,529 (1,875) 34,654
Operating income 11,128 3,695 14,823
Other income 2,919 2,919
Income before income taxes 14,047 3,695 17,742
Provision for income taxes 1,033 272 (4) 1,305
Net income $13,014 3,423 $16,437
Earnings per share - basic: $.13 $.16
- diluted:(5) $.11 $.14
Weighted average common
shares used in computing
per share amounts
- basic: 99,734 99,734
- diluted: 131,908 131,908
Six Months Ended
(unaudited) Pro Forma
July 3, July 3,
2005 Adjustments 2005
Net sales $348,513 $348,513
Cost of sales:
Cost of goods sold 255,893 255,893
Intangible asset amortization 3,741 (3,741)(1) -
Total cost of sales 259,634 (3,741) 255,893
Gross profit 88,879 3,741 92,620
Operating expenses:
Sales and marketing 18,644 18,644
Research and development 30,054 30,054
General and administrative 18,694 18,694
Intangible asset amortization 3,861 (3,861)(2) -
In-process research and
development 350 (350)(3) -
Total operating expenses 71,603 (4,211) 67,392
Operating income 17,276 7,952 25,228
Other income (expense) 3,152 3,152
Income before income taxes 20,428 7,952 28,380
Provision for income taxes 2,043 795 (4) 2,838
Net income $18,385 7,157 $25,542
Earnings per share - basic: $.18 $.26
- diluted:(5) $.16 $.22
Weighted average common
shares used in computing
per share amounts
- basic: 99,654 99,654
- diluted: 131,590 131,590
(1) This represents costs related to the amortization of acquired
technology.
(2) This represents costs related to the amortization of other
identified intangible assets.
(3) This represents the charge for acquired in-process research and
development associated with the acquisition of Kaval Wireless.
(4) This represents the change in the provision for income taxes
related to the preceding pro forma adjustments to arrive at an
assumed effective tax rate of 10%.
(5) Diluted earnings per share include the add back of interest
expense costs associated with the assumed conversion of the
company's outstanding convertible subordinated notes, which on
a pre-tax basis equals approximately $1.8 million for the second
quarter 2005 and approximately $3.5 million for the first
six months of 2005.
POWERWAVE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
July 3, 2005 Jan. 2, 2005
(unaudited)(1) (audited)(2)
ASSETS:
Cash and cash equivalents $277,521 $147,451
Short-term investments - 135,200
Restricted cash 6,487 6,815
Accounts Receivable, net 171,226 133,060
Inventories, net 59,970 65,819
Property, plant and equipment, net 133,737 146,430
Other assets 330,537 385,996
Total assets $979,478 $1,020,771
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable $100,330 $79,534
Long-term debt 330,000 330,000
Accrued expenses and other liabilities 81,445 95,625
Total shareholders' equity 467,703 515,612
Total liabilities and
shareholders' equity $979,478 $1,020,771
(1) July 3, 2005 balances are preliminary and subject to
reclassification adjustments.
(2) Jan. 2, 2005 balances were derived from audited financial
statements.
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