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Powerwave Technologies Reports Third Quarter Results

Stocks in this article: PWAV

Company Background

Powerwave Technologies, Inc., is a global supplier of end-to-end wireless solutions for wireless communications networks. Powerwave designs, manufactures and markets a comprehensive suite of wireless solutions, including antennas, base station products and advanced coverage solutions, utilized in all major wireless network protocols and frequencies, including Next Generation Networks in 4G technology, such as LTE and WiMAX. Corporate headquarters are located at 1801 E. St. Andrew Place, Santa Ana, Calif. 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 for the third quarter ended September 30, 2012.

UNAUDITED - PRELIMINARY

POWERWAVE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

   
Three Months Ended   Nine Months Ended
Sept. 30,   Oct. 2, Sept. 30,   Oct. 2,
  2012     2011     2012     2011  
Net sales $ 42,125 $ 77,078 $ 127,766 $ 384,343
Cost of sales:
Cost of goods 52,101 71,282 155,990 294,895
Restructuring and impairment charges   782     -     11,341     -  
Total cost of sales   52,883     71,282     167,331     294,895  
 
Gross profit (loss) (10,758 ) 5,796 (39,565 ) 89,448
 
Operating expenses:
Sales and marketing 10,365 7,544 23,021 24,695
Research and development 8,383 15,315 31,980 47,666
General and administrative 9,928 11,597 30,379 34,920
Restructuring and impairment charges   2,098     147     5,486     189  
Total operating expenses   30,774     34,603     90,866     107,470  
 
Operating loss (41,532 ) (28,807 ) (130,431 ) (18,022 )
 
Other income (expense), net   (4,909 )   (6,435 )   (13,012 )   (13,271 )
 
Loss before income taxes (46,441 ) (35,242 ) (143,443 ) (31,293 )
Income tax provision   6,287     (158 )   9,657     3,745  
Net loss $ (52,728 ) $ (35,084 ) $ (153,100 ) $ (35,038 )
 
 

Net loss per share:

- basic:

$ (1.66 ) $ (1.09 ) $ (4.82 ) $ (1.05 )

 

- diluted: 1

$ (1.66 ) $ (1.09 ) $ (4.82 ) $ (1.05 )
 

Weighted average common shares used in

computing per share amounts:

- basic:

31,761

32,189

31,741

33,265

 

- diluted:

31,761 32,189 31,741 33,265
 

1The diluted earnings and loss per share does not include an add back of interest expense costs associated with the assumed conversion of the Company’s outstanding convertible subordinated notes as the effect would be anti-dilutive.

POWERWAVE TECHNOLOGIES, INC.

PERCENTAGE OF NET SALES

 
Three Months Ended Nine Months Ended
(unaudited)   (unaudited)
Sept. 30,   Oct. 2, Sept. 30,   Oct. 2,
2012   2011   2012   2011  
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales:
Cost of goods 123.7 92.5 122.1 76.7
Restructuring and impairment charges 1.8   -   8.9   -  
Total cost of sales 125.5   92.5   131.0   76.7  
 
Gross profit (loss) (25.5 ) 7.5 (31.0 ) 23.3
 
Operating expenses:
Sales and marketing 24.6 9.8 18.0 6.4
Research and development 19.9 19.9 25.0 12.4
General and administrative 23.6 15.0 23.8 9.1
Restructuring and impairment charges 5.0   0.2   4.3   0.0  
Total operating expenses 73.1   44.9   71.1   28.0  
 
Operating loss (98.6 ) (37.4 ) (102.1 ) (4.7 )
 
Other income (expense), net (11.6 ) (8.3 ) (10.2 ) (3.4 )
 
Loss before income taxes (110.2 ) (45.7 ) (112.3 ) (8.1 )
Income tax provision 15.0   (0.2 ) 7.5   1.0  
Net loss (125.2 )% (45.5 )% (119.8 )% (9.1 )%
 

POWERWAVE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF PRO FORMA RESULTS

(In thousands, except per share amounts)

 
  Three Months Ended   Nine Months Ended
(Unaudited) (Unaudited)
    Pro Forma     Pro Forma
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2012   Adjustments   2012   2012   Adjustments   2012
Net sales $ 42,125 $ 42,125 $ 127,766 $ 127,766
Cost of sales:
Cost of goods sold 52,101

(61

) 1

52,040 155,990 (243

) 1

155,747
Restructuring and impairment charges   782     (782

) 2

    -     11,341     (11,341

) 2

    -  
Total cost of sales   52,883     (843

)

    52,040     167,331     (11,584 )     155,747  
Gross profit (loss) (10,758 ) 843 (9,915 ) (39,565 ) 11,584 (27,981 )
 
Operating expenses:
Sales and marketing 10,365

50

1

10,415 23,021 (112

) 1

22,909
Research and development 8,383

23

1

8,406 31,980 (286

) 1

31,694
General and administrative 9,928 (322

) 1

9,606 30,379 (1,179

) 1

29,200
Restructuring and impairment charges   2,098    

(2,098

) 2

    -     5,486     (5,486

) 2

    -  
Total operating expenses   30,774     (2,347 )     28,427     90,866     (7,063 )     83,803  
Operating income (loss) (41,532 ) 3,190 (38,342 ) (130,431 ) 18,647 (111,784 )

 

Other income (expense), net   (4,909 )  

2,619

3

    (2,290 )   (13,012 )  

5,173

3

    (7,839 )
 
Income (loss) before income taxes (46,441 ) 5,809 (40,632 ) (143,443 ) 23,820 (119,623 )
Income tax provision (benefit)   6,287    

(10,350

) 4

    (4,063 )   9,657     (21,619

) 4

    (11,962 )
Net income (loss) $ (52,728 )   16,159     $ (36,569 ) $ (153,100 )   45,439     $ (107,661 )
 

Net loss per share:

- basic:

$ (1.66 ) $ (1.15 ) $ (4.82 ) $ (3.39 )

 

- diluted: 5

$ (1.66 ) $ (1.15 ) $ (4.82 ) $ (3.39 )
 
Weighted average common shares used in

computing per share amounts:

 

 

 

 

- basic:

31,761 31,761 31,741 31,741

 

- diluted:

31,761 31,761 31,741 31,741
 

1This represents the equity compensation expense allocation pursuant to ASC Topic 718.

2This cost includes restructuring and impairment charges related to the current restructuring plans included in cost of goods sold and operating expenses, respectively.

3This represents the amortization of the debt discount and interest accretion on outstanding debt during the fiscal periods.

4This represents the change in the provision for income taxes related to the preceding pro forma adjustments to arrive at an assumed effective income tax benefit rate of 10.0% for the third quarter of 2012 and year to date for 2012.

5Diluted earnings per share do not include the add back of interest expense costs associated with the assumed conversion of the Company’s outstanding convertible notes as the effect would be anti-dilutive.

POWERWAVE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

   
September 30, January 1,
2012   2012  

(unaudited) 1

(see note) 2

ASSETS:
 
Cash and cash equivalents $ 16,318 $ 64,121
Restricted cash 6,001 6,162
Restricted deposits 5,610 -
Accounts receivable, net 62,449 96,777
Inventories, net 54,677 88,627
Property, plant and equipment, net 12,322 27,771
Other assets   56,078     58,872  
Total assets $ 213,455   $ 342,330  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
 
Accounts payable $ 46,815 $ 71,094
Current portion of long-term debt - -
Long-term debt 290,405 252,190
Accrued expenses and other liabilities 58,833 51,744
Total shareholders' deficit   (182,598 )   (32,698 )
Total liabilities and shareholders’ equity $ 213,455   $ 342,330  
 

1September 30, 2012 balances are preliminary and subject to reclassification adjustments.

2January 1, 2012 balances were derived from the audited consolidated financial statements.

Copyright Business Wire 2010
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