Powerwave's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Powerwave Technologies Inc. (PWAV)

Q1 2012 Results Earnings Call

May 03, 2012 5:00 PM ET

Executives

Tom Spaeth – Treasurer

Ron Buschur – President and CEO

Kevin Michaels – Chief Financial Officer

Analysts

Mike Walkley – Canaccord

Jason North – Jefferies

Amir Tiwana – BRT Capital

Randy Laufman – Imperial Capital

Arun Seshadri – Credit Suisse

Presentation

Operator

Good day, ladies and gentlemen. And welcome to the First Quarter 2012 Powerwave Technologies Earnings Conference Call. My name is Lisa, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Tom Spaeth, Treasurer. Please proceed, sir.

Tom Spaeth

Thank you. Good afternoon. And welcome to Powerwave Technologies first quarter 2012 financial results conference call. I’m Tom Spaeth, Powerwave’s Treasurer. Joining us on today’s call will be Ron Buschur, President and Chief Executive Officer; and Kevin Michaels, Chief Financial Officer.

Before starting, I would like to point out that various remarks we make about future expectations, plans and prospects for Powerwave, including but not limited to anticipated revenues and revenue growth rates, improvements in sales, the split between operator and OEM sales, operating margins, gross profit margins, earnings per share levels, operating expense targets, cash flow projections, revenue composition, supply chain constraints and shortages, manufacturing levels, the benefits of the Tatfook transaction, the timing and closing of the Tatfook transaction, improvements in cost structure, future cost savings related to our cost reduction activities, the timing of restructuring actions and associated cost savings, our ability to reduce our use of cash, availability of cash resources, demand levels for the company’s product lines including demand for the company’s advanced technology products in government markets, success and qualifying new products with customers, projected growth in various markets including government, public safety, and defense, trends in the wireless infrastructure market, including adoption of 4G capabilities and increases in spending by North American operators on their networks, the timing of product deliveries and future orders, the company’s ability to grow its core wireless business and enter into and compete in vertical markets for its products such as government and defense markets, common stock prices, the company’s ability to resolve new product production issues, debt purchases, the company’s ability to refinance its debt, the success of new products and market acceptance in new vertical markets, expense levels, capital expenditure rates, inventory turns, tax rates and days sales outstanding are all forward-looking statements, which are intended to qualify for the Safe Harbor from liability established by the Private Securities Reform Act of 1995.

The 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 increase sales and conserve cash, our reliance on a limited number of customers, our ability to control operating costs and conserve cash, our ability to realize anticipated cost savings and synergies, execute restructuring activities in a timely fashion without negatively impacting our business, the negative impact on demand for our products due to the macro-economic environment, reduced demand due to industry consolidation among our major customers, day -- delays or cancellations of wireless network capacity expansions and buildouts for both existing networks and new 4G networks, fluctuations in foreign currencies, ability to accurately forecast cash flows and credit collections, the ability to refinance debt, the ability to enter into new markets for our products and solution, the impact of competitive products and pricing, economic and political conditions, the loss of one or more significant customer accounts, delays in the closing of the Tatfook transaction, any difficulty in transitioning China manufacturing operations to Tatfook and the possibility of disruptions in the supply of our products.

Please refer to our press release, Powerwave’s annual report on Form 10-K for the fiscal year ended January 1, 2012, and other filings which were unfilled 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, 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 find -- found at our website at powerwave.com and on business square. 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 Michaels

Thank you, Tom. With all of these risk factors in mind, I’d like to start reviewing our financial results, which we are also summarized in our press release. Net sales for the first quarter of 2012 were $43.3 million and we reported a GAAP net loss of $57.9 million, which equates a basic loss per share of $1.83.

This includes the total of $1.3 million of non-cash debt interest accretion expense related to certain of our outstanding convertible notes, $800,000 of non-cash pre tax stock-based compensation expense, an $8.8 million of restructuring expense in the quarter. All these charges and amortization totaled approximately $10.9 million for the first quarter.

Read the rest of this transcript for free on seekingalpha.com