SANTA ANA, Calif., Jan. 27, 2005 (PRIMEZONE) -- Powerwave Technologies, Inc. (Nasdaq:PWAV) today reported net sales of $156.4 million for its fourth quarter ended January 2, 2005, compared to fourth quarter fiscal 2003 revenues of $72.2 million. Powerwave also reported a fourth quarter net loss of $41.5 million, which includes a total of $4.8 million of acquisition related restructuring charges and intangible asset amortization as well as a $45.0 million non-cash charge to reflect the recording of a full valuation allowance on Powerwave's US deferred tax assets. The net loss equates to a basic loss per share of 41 cents for its fiscal fourth quarter, compared to a net loss of $1.4 million, or a basic loss per share of 2 cents for the prior year period. Powerwave completed the acquisition of LGP Allgon Holding AB during the second quarter of 2004 and the results reported herein include the results of LGP Allgon Holding AB for the entire fourth quarter of fiscal year 2004.
For the fourth quarter of fiscal 2004, excluding the restructuring and acquisition related charges and intangible asset amortization as well as the valuation allowance on the US deferred tax assets, Powerwave would have reported operating income of $10.3 million, net income after taxes of $8.3 million and diluted earnings per share of 7 cents.
For the entire fiscal year 2004 ending on January 2, 2005, Powerwave reported total net sales of $473.9 million compared with $239.1 million for all of fiscal year 2003. Fiscal year 2004 includes the results of LGP Allgon from May 2004. For all of fiscal year 2004, Powerwave reported a total net loss of $72.1 million, or a basic loss per share of 80 cents, compared to a net loss of $32.9 million or a basic loss per share of 51 cents for fiscal 2003. The results for fiscal year 2004 include $38.9 million of acquisition and restructuring related charges and intangible asset amortization, as well as a non-cash charge of $45.0 million related to the establishment of a full valuation allowance against our US deferred tax assets. The results for the fiscal year 2003 include $16.4 million of restructuring expenses, impairment charges and intangible asset amortization.
"We are pleased to report solid sequential quarterly revenue growth of 13% for our fourth quarter financial results," stated Bruce C. Edwards, Chief Executive Officer of Powerwave Technologies. "We believe that our portfolio of infrastructure products and services for the wireless communications industry is enabling us to enhance our leadership position in both the OEM and direct to operator channels. As we begin fiscal year 2005, we remain extremely positive with regards to our longer term outlook for increasing demand within the wireless communications infrastructure industry."
For the fourth quarter of 2004, total Americas revenues were $35.5 million or approximately 23% of revenues, as compared to $44.0 million or approximately 61% of revenues for the fourth quarter of 2003. Total sales to customers based in Asia accounted for approximately 13% of revenues or $20.6 million for the fourth quarter of 2004, compared to 8% of revenues or $5.9 million for the fourth quarter of 2003. Total Europe, Africa and Middle East revenues for the fourth quarter of 2004 were $100.4 million or approximately 64% of revenues, as compared to $22.4 million or approximately 31% of revenues for the fourth quarter of 2003.
For the fourth quarter of 2004, sales of antenna systems totaled $41.4 million or 26% of total revenues, base station subsystems sales totaled $79.3 million or 51% of revenues, coverage solutions sales totaled $23.9 million or 15% of revenues, and contract manufacturing accounted for $11.8 million or 8% of total revenues for the fourth quarter.
For the fourth quarter of 2004, Powerwave's largest customers included Nortel Networks Corporation, which accounted for approximately 17% of revenues and Nokia Corporation, which accounted for over 10% of revenues. In terms of customer profile for the fourth quarter of 2004, our total OEM sales accounted for approximately 44% of total revenues, total direct and operator sales accounted for approximately 48% of revenues, and contract manufacturing accounted for 8% of revenues for the quarter.
Balance Sheet
At January 2, 2005, Powerwave had total cash and cash equivalents of $289.5 million, which includes restricted cash of $6.2 million. Total net inventories were $65.8 million and net accounts receivable were $133.1 million. During the fourth quarter of fiscal 2004, Powerwave completed an offering of $200 million of 1.875% convertible subordinated notes due 2024 and simultaneously repurchased $40 million (5.1 million shares) of its common stock. This offering resulted in net cash proceeds to Powerwave of approximately $154.0 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 in the United States (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 and expenses arising from the acquisition of LGP Allgon, including restructuring charges and the amortization of certain intangible assets resulting from the purchase accounting valuation of LGP Allgon. In addition, this presentation of non-GAAP financial information excludes the non-cash valuation allowance on the company's domestic US deferred tax assets. 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, the amortization of intangible assets is a non-cash expense and the valuation allowance on the company's domestic US deferred tax assets is also a non-cash charge.
Company Background
Powerwave Technologies, Inc., is a global supplier of end-to-end wireless solutions for wireless communications networks. Powerwave designs, manufactures and markets antennas, boosters, combiners, filters, repeaters, multi-carrier RF power amplifiers and tower-mounted amplifiers and advanced coverage solutions, all for use in cellular, PCS and 3G networks throughout the world. 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 fourth quarter ended January 2, 2005.
Conference Call
Powerwave is providing a simultaneous Webcast and live dial-in number of its fourth quarter fiscal 2004 financial results conference call on Thursday, January 27, 2005, at 2:00 PM Pacific time. To access this audio Webcast, select the Investor Relations page at www.powerwave.com and select the Powerwave Technologies Q4 earnings conference call. The call will last for approximately 1 hour. To listen to the live call, please call (617) 786-2905 and enter reservation number 16086807. A replay of the Webcast will be available beginning approximately 2 hours after completion of the initial Webcast. Additionally, an audio playback of the conference call will be available at approximately 5:00 PM Pacific time on January 27, 2005 through February 9, 2005 by calling (617) 801-6888 and entering reservation number 22405852.
Forward-Looking Statements
The foregoing statement regarding the outlook for increasing demand in the wireless communications infrastructure industry is a ``forward looking statement." This statement is subject to risks and uncertainties which could cause our actual results to differ materially from those projected or implied. 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 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; 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 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 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 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 for the fiscal year ended December 28, 2003 and Form 10-Q for the quarter ended October 3, 2004, 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 to these forward-looking statements which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
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