Powerwave Technologies, Inc. ( PWAV) Q2 2011 Earnings Call August 4, 2011 5:00 pm ET Executives Tom Spaeth – Vice President, Treasurer Ronald J. Buschur – President and Chief Executive Officer Kevin T. Michaels – Chief Financial Officer and Secretary Analysts Matthew D. Ramsay – Canaccord Genuity Steven O'Brien – JPMorgan Scott Searle – Merriman Capital, Inc. Lawrence Harris – C.L. King & Associates, Inc. Ted Moreau – WJB Capital Group, Inc. Tony Rao – East Shore Partners Presentation Operator
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These statements are subject to numerous risks and uncertainties that could cause Powerwave's actual results to be materially different from those projected or implied. Some of the risks and uncertainties include our ability to accurately forecast and anticipate customer orders, our ability to obtain material components within expected lead times, realize anticipated cost savings and synergies, the negative impact on demand for our products due to the macroeconomic environment, reduced demand due to industry consolidation among our major customers, fluctuations in foreign currencies, the ability to accurately forecast cash flows and credit collections, the ability to enter into new markets for our products and solutions, the impact of competitive products and pricing, economic and political conditions and the loss of one or more significant customer accounts.Please refer to our press release, Powerwave's current Form 10-K for the fiscal year ended January 2, 2011 and our Form 10-Q for the quarterly period ended April 3, 2011 and other filings which are on file with the Securities and Exchange Commission for additional information on factors which could cause our actual results to be different from those projected or implied. In addition, on this call we will discuss non-GAAP financial information. A reconciliation of the non-GAAP financial information to our financial statements as prepared under GAAP is included in our press release dated today, which can be found at our website at powerwave.com and on Business Wire. The press release also has detailed information concerning several of the significant items impacting our results and we urge you to review that information. Now, I'm going to turn the call over to Kevin Michaels, Powerwave's Chief Financial Officer. Kevin T. Michaels Thank you, Tom. And with all these risk factors in mind, I would like to start by reviewing our financial results, which are also summarized in our press release.
Net sales for the second quarter of 2011 were $170.6 million and we reported a GAAP net income of $7 million, which equates to basic and fully diluted earnings per share of $0.04. This includes 700,000 of non-cash debt discount amortization expense related to certain of our outstanding convertible notes, and $1.9 million of non-cash pre-tax stock based compensation expense in the quarter. All of these charges and amortization totaled approximately $2.7 million for the second quarter.On a pro forma basis, excluding the restructuring and impairment charges, the debt-related charges and the stock based compensation expenses for the quarter, we generated operating income equal to 8.6% of revenue and pro forma net income of $9.2 million, which equates to a pro forma net earnings of $0.05 per share. Now looking at our revenues on a geographic basis, the North American market continues to be our strongest market as was expected. Our total Americas revenue for the second quarter was approximately $80.2 million or 47% of revenue. Our total Asia-Pacific sales were approximately $41.8 million or 25% of revenue and total European and other international revenues were $48.6 or approximately 28% of revenue. In the second quarter, Antenna Systems product group sales totaled $76 million, or 45% of total revenue. Base Station Subsystem sales totaled $77.6 million or 45% of revenue and Coverage Solutions sales, totaled $17 million or 10% of revenue. Read the rest of this transcript for free on seekingalpha.com