Powerwave surges on PCS amp ramp

Electronic News, August 18, 1997

Irvine, Calif.--Powerwave Technologies, Inc. completed a high-volume manufacturing ramp of PCS amplifier products for South Korea and by the time the quarter was over, the products accounted for approximately 48 percent of sales--up from 9 percent in the just-prior quarter, fueling a surge in sales and profits.

The company reported 2Q97 sales of $27.4 million, up 79 percent from 2Q96's $15.3 million. Net income for the quarter ended June 29, 1997 jumped to $3.4 million, or 20 cents per share, from $1.9 million, or 13 cents per share.

Sequentially, revenues gained 35 percent from $20.2 million in 1Q97, and net income grew 24 percent from $2.8 million in that quarter.

"The second quarter of 1997 saw Powerwave substantially complete the high-volume manufacturing ramp of its new single-carrier PCS amplifier products for the South Korean market," stated President/CEO Bruce C. Edwards. "During the first quarter of 1997, revenues related to PCS products accounted for approximately 9 percent of sales or $1.8 million. For the second quarter of 1997, revenues related to PCS products accounted for approximately 48 percent of sales or $13.1 million."

Also, during the quarter, Powerwave filed a registration statement with the Securities and Exchange Commission to sell 3,000,000 shares of its common stock, of which 2,250,000 shares would come from certain shareholders. After the end of the second quarter and after increasing the number of shares for sale to 3,250,000, the sale of shares was completed on July 7, 1997, at a price of $22 per share. Underwriters also exercised the over-allotment option for 487,500 more common shares.

Net proceeds for Powerwave's portion of the share sale are approximately $20.4 million. Lead manager for the deal was Alex. Brown, with UBS Securities and Wessels, Arnold & Henderson as co-managers.

Powerwave, which said that the actual accounting for the transaction would take place in 3Q97, is a supplier of RF power amplifiers for use in wireless communications networks. It continues to focus on asset management, generating inventory turns of 10.7 based on net inventory of $6.3 million. At June 29, 1997, the company had total cash and cash equivalents of approximately $42.6 million, over 66 percent of total assets of about $64.2 million.