POWERWAVE-TECHNOLOGIES: modeFinance Credit Report

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’ sMORE Credit Ratings and MORE CreditLimit to help you in the decision making.It covers all essential information includingfinancial statements of the last three yearsand descriptive information including tradedescription and sector analysis.This report type is ideally suited fordecisions on transactions with each levelof credit risk.

modeFinanceTM HeadquarterBuilding A - AREA Science ParkPadriciano 99 - 34149 Trieste - ItalyPh.: +39 040 375 5337Fax: +39 040 375 [email protected]

askMORETM is a registered mark of modeFinanceTM

POWERWAVE TECHNOLOGIESINCORPORATEDTuesday, 29 January 2013

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name POWERWAVE TECHNOLOGIES INCORPORATED

Identification number US112723423

Country United States of America

ZIP code and city 92705 - SANTA ANA

Address 1801, EAST SAINT ANDREW PLACE

+1 714 466 1000

www.powerwave.com

[email protected]

Legal form Not available

Account Consolidated

Incorporation date 1985/01

NACE 2 Sector 2630 - Manufacture of communication equipment

Listed

Status Active

MORE Credit limit Not assessable on the base of the available informations

01/01/2012 02/01/2011 03/01/2010

Turnover (th e) 343,512 443,596 395,793

Rating CC BB CCC

Probability of default 42.00% 1.20% 16.00%

Confidence Level 100% 100% 100%

Solvency ratios

Leverage ratio -11.47 5.95 635.78

Total asset/Total liabilities 0.91 1.17 1.00

Liquidity ratios

Current Ratio 2.70 1.62 2.48

Quick Ratio 1.93 1.38 1.97

Profitability and economic equili-

brium ratios

Return on investement ROI (%) -17.15 6.02 3.76

Return on equity ROE (%) -237.39 6.06 -926.23

Asset turnover 1.30 1.39 1.46

Interest paid weight -0.23 0.55 1.16

Gross Profit/Operating revenue 0.25 0.33 0.29

Interest Coverage ratios

EBIT interest coverage ratio -3.59 2.16 0.16

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio -11.47 0.54 1.64 3.21 -1.78

Total asset/Total liabilities 0.91 2.84 1.60 1.27 0.89

Liquidity ratios

Current Ratio 2.70 2.70 1.48 1.09 0.64

Quick Ratio 1.93 2.09 1.09 0.80 0.38

Profitability and economic equilibrium ratios

Return on investement ROI (%) -17.15 12.72 5.23 -1.77 -18.40

Return on equity ROE (%) -237.39 15.98 7.46 -11.74 -120.00

Asset turnover 1.30 1.23 1.14 1.02 1.00

Interest paid weight -0.23 0.01 0.18 -0.03 -0.14

Gross Profit/Operating revenue 0.25 0.30 0.21 0.16 0.13

Interest Coverage ratios

EBIT interest coverage ratio -3.59 69.97 3.83 -1.28 -5.50

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 73 44 49 57 57

Days Sales Outstanding (DSO) 79 68 73 75 49

Days Payable Outstanding (DPO) 58 30 42 57 57

Cash Conversion Cycle (DIO + DSO - DPO) 94 78 88 84 55

Numer of analyzed companies - 378 700 305 86

(Average) Rating CC A BBB B CC

The sector has been chosen according to:

international companies in the sector NACE 2 2630 with financial data of year 2012.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 01/01/2012 02/01/2011 03/01/2010

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.75 0.69745

Number of months 12 12 12

Total assets 264,587 319,188 271,902

Fixed assets 26,250 60,082 66,632

Intangible fixed assets 0 0 0

Tangible fixed assets 21,464 57,207 62,689

Other fixed assets 4,786 2,875 3,943

Current assets 238,337 259,106 205,270

Stocks 68,500 37,813 42,226

Debtors 74,799 140,220 99,700

Other current assets 95,038 81,073 63,344

Cash & cash equivalent 49,559 46,201 42,153

Shareholders funds -25,272 45,959 427

Capital 669,885 662,040 575,643

Other shareholders funds -695,157 -616,081 -575,216

Total liabilities 289,859 273,229 271,475

Non current liabilities 201,729 112,942 188,548

Long term debt 194,918 112,500 187,602

Other non-current liabilities 6,812 442 946

Current liabilities 88,130 160,287 82,928

Loans 0 41,528 0

Creditors 54,949 84,679 57,072

Other current liabilities 33,181 34,079 25,855

Total shareh. funds & liab. 264,587 319,188 271,902

NET DEBT (th e) 01/01/2012 02/01/2011 03/01/2010

Short term debts 0 41,528 0

Long term debt 194,918 112,500 187,602

Cash & cash equivalent 49,559 46,201 42,153

Net debt 145,359 107,827 145,449

01/01/2012 02/01/2011 03/01/2010

Working capital 88,350 93,353 84,854

Net Current Assets 150,207 98,819 122,342

01/01/2012 02/01/2011 03/01/2010

Days Sales Of Inventory (DIO) 73 31 39

Days Sales Outstanding (DSO) 79 115 92

Days Payable Outstanding (DPO) 58 70 53

Cash Conversion Cycle (DIO + DSO - DPO) 94 76 78


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Income Statement

INCOME STATEMENT (th e) 01/01/2012 02/01/2011 03/01/2010

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.75 0.69745

Number of months 12 12 12

Sales 343,512 443,596 395,793

Revenues growth (%) -23 12 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized0 0 0

Operating revenue / turnover 343,512 443,596 395,793

Total operating costs 381,228 420,614 393,934

Costs growth (%) -9 7 -

Service costs - - -

Material costs - - -

Costs of employees - - -

EBITDA -22,995 40,448 17,761

Depreciation 14,721 17,467 15,902

EBIT -37,715 22,981 1,859

Financial P/L -18,167 -14,399 -3,525

Financial revenue 150 149 399

Financial expenses 18,317 14,548 3,924

Interest paid 10,504 10,624 11,882

P/L before tax -55,882 8,582 -1,666

Extr. and other P/L - 0 0

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L - 8,582 -1,666

Taxation 4,110 5,797 2,289

P/L for period -59,992 2,785 -3,955

01/01/2012 02/01/2011 03/01/2010

Costs of Good Sold 258,434 296,932 279,823

Gross Profit 85,079 146,663 115,970

Other Operating Expenses 122,794 123,682 114,110

01/01/2012 02/01/2011 03/01/2010

Cash flow -45,271 20,251 11,947

Added value - - -

01/01/2012 02/01/2011 03/01/2010

Number of employees 2,179 2,140 2,256


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Evolutions and trends


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Qualitative information

Full overview This is an American company engaged in the design, manufacture and marketing of antenna systems, base station

systems and coverage systems. It is a global leader in end - to - end wireless coverage and capacity solutions for

wireless communications networks. The company was formerly known as Milcom International, Inc. It was foun-

ded in 1985 and its corporate headquarters is located in Santa Ana, state of California. The company’s extensive

product line includes base station antennas, antennas with Remote Electrical Tilt (RET), tower mounted amplifiers

(TMA), filters, power amplifier products, RF (radio frequency) conditioning products, multi - carrier RF power am-

plifiers, boosters, combiners, repeaters and coverage solution products for cellular, PCS (Personal Communications

Service) and 3G wireless communications network applications. The company aims to attain profitable and sustai-

nable growth in pursuit of providing advanced wireless solutions through operational excellence and innovative

technology. It has operations in Asia - Pacific; Europe; Middle East; Africa; and South America. The company’s

customers include original equipment manufacturers, and wireless network operators such as Nokia and Siemens

Communications.

History Formerly known as Milcom International, Inc.

Primary business line Engaged in the design, manufacture and marketing of antenna systems, base station systems and coverage

systems.

Secondary business line Not available.

Main activity Manufacturing; Wholesale.

Secondary activity Not available.

Main products and services Base station antennas, antennas with Remote Electrical Tilt (RET), tower mounted amplifiers (TMA), filters, po-

wer amplifier products, RF (radio frequency) conditioning products, multi - carrier RF power amplifiers, boosters,

combiners, repeaters and coverage solution products for cellular, PCS (Personal Communications Service) and 3G

wireless communications network applications.

Size estimate A global leader in end - to - end wireless coverage and capacity solutions for wireless communications networks.

Strategy, organization and policy Aims to attain profitable and sustainable growth in pursuit of providing advanced wireless solutions through

operational excellence and innovative technology.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Not available.

Main domestic country United States of America.

Main foreign countries or regions Asia - Pacific; Europe; Middle East; Africa; and South America.

Main production sites Santa Ana.

Main distribution sites Santa Ana.


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Main sales representation sites Not available.

Main customers Nokia and Siemens Communications.

Auditor/Advisor/Bank

name type address

DELOITTE & TOUCHE LLP Auditor -

U.S. Stock Transfer Corporation Transfer Agent -

Board

name date of birth nationality function

Mr. Carl William Neun 23/01/1943 United States Independent Chairman of the Board

Mr. Moiz M Beguwala 30/04/1946 - Independent Director

Mr. Ken J Bradley - - Independent Director

Mr. Richard Burns - - Independent Director

Mr. Ronald Joseph Buschur 07/03/1964 - President, Chief Executive Officer, Director

Mr. John L Clendenin - - Independent Director

Mr. David L George - - Independent Director

Mr. Eugene Louis Goda 20/04/1936 - Independent Director

Sharehoders (the first twenty shareholders ordered by Direct %)

KRYZANOWSKI JOHN A. Rating:

Country ISO code SY Operating Revenue (MIL $) -

NACE Rev. 2, Core code - Total Assets (MIL $) -

Direct % 9.70 Number of Employees -

Total % - Information date 2012/10

Address : Not available


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ARTIS CAPITAL MANAGEMENT LP via its funds Rating:

Country ISO code US Operating Revenue (MIL $) -


Direct % - Number of Employees 0

Total % 7.84 Information date 2012/08


EMPIRE CAPITAL PARTNERS via its funds Rating:

Country ISO code US Operating Revenue (MIL $) 0.46





GFH LP via its funds Rating:






BLACKROCK, INC. via its funds Rating: BB

Country ISO code US Operating Revenue (MIL $) 9081

NACE Rev. 2, Core code - Total Assets (MIL $) 179896




VANGUARD GROUP, INC. THE via its funds Rating:


NACE Rev. 2, Core code - Total Assets (MIL $) 1830.07




GOLDMAN SACHS GROUP, INC via its funds Rating:






D. E. SHAW INVESTMENTS, L.P. via its funds Rating:







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PARADIGM CAPITAL MANAGEMENT, INC via its funds Rating:






AQR CAPITAL MANAGEMENT LLC via its funds Rating:






DIMENSIONAL FUND ADVISORS LP via its funds Rating: A






SUSQUEHANNA INTL GROUP via its funds Rating:






UBS AG via its funds Rating:

Country ISO code CH Operating Revenue (MIL $) 10970.68





BARCLAYS PLC via its funds Rating: CCC

Country ISO code GB Operating Revenue (MIL $) 45739.82





GOVERNMENT OF NORWAY via its funds Rating:

Country ISO code NO Operating Revenue (MIL $) -


Direct % - Number of Employees -




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CHARLES SCHWAB CORPORATION via its funds Rating:






STATE OF CALIFORNIA via its funds Rating:






POWER CORPORATION OF CANADA via its funds Rating:

Country ISO code CA Operating Revenue (MIL $) 19601.37





JANE STREET HOLDING II LLC via its funds Rating:






INVESCO LTD. via its funds Rating: BB

Country ISO code BM Operating Revenue (MIL $) 4122.7





Subsidiaries (the first twenty subsidiaries ordered by Direct %)

POWERWAVE OVERSEAS HOLDINGS LIMITED Rating: A

Country ISO code GB Operating Revenue (MIL $) -





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POWERWAVE UK LIMITED Rating: A

Country ISO code GB Operating Revenue (MIL $) -




P - WAVE LTD Rating:

Country ISO code IL Operating Revenue (MIL $) -


Direct % >50.00 Number of Employees -


COGNITION NETWORK LLC Rating:



Direct % MO Number of Employees 2


FEICHUANG( SUZHOU ) TELECOM PRODUCTS CO.,LTD Rating: BBB

Country ISO code CN Operating Revenue (MIL $) 250.48



Total % MO Information date 2012/01

MICROWAVE VENTURES INC Rating:

Country ISO code PH Operating Revenue (MIL $) -


Direct % MO Number of Employees -


P - WAVE LTD Rating:

Country ISO code IL Operating Revenue (MIL $) -




POWERWAVE ASIA INC Rating:





POWERWAVE COGNITION INC Rating:






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POWERWAVE ENTERPRISES, LLC Rating:





POWERWAVE FINLAND OY Rating: BB

Country ISO code FI Operating Revenue (MIL $) 11.58




POWERWAVE HOLDINGS PHILIPPINES INC Rating:

Country ISO code PH Operating Revenue (MIL $) -




POWERWAVE HUNGARY KFT Rating:

Country ISO code HU Operating Revenue (MIL $) -




POWERWAVE TECHNOLOGIES (SUZHOU) CO, LTD Rating:

Country ISO code - Operating Revenue (MIL $) -




POWERWAVE TECHNOLOGIES (THAILAND) LIMITED Rating:

Country ISO code TH Operating Revenue (MIL $) -




POWERWAVE TECHNOLOGIES BRAZIL COMÉRCIO EQUIPAMENTOS DE TELECO-

MUNICAÇÕES LTDA.Rating:

Country ISO code BR Operating Revenue (MIL $) -




POWERWAVE TECHNOLOGIES CANADA, LTD. Rating:

Country ISO code CA Operating Revenue (MIL $) -





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POWERWAVE TECHNOLOGIES ESTONIA OÜ Rating: A

Country ISO code EE Operating Revenue (MIL $) 45.79




POWERWAVE TECHNOLOGIES FRANCE Rating: BBB

Country ISO code FR Operating Revenue (MIL $) 2.19




POWERWAVE TECHNOLOGIES GERMANY GMBH Rating: A

Country ISO code DE Operating Revenue (MIL $) -





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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

economic and financial flow and fund equilibrium.

AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial

equilibrium. Difference from AAA is slight.

AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in

circumstances and economic conditions than companies in higher rated categories.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial

commitments could be affected by serious unfavourable events.

BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing

uncertainties or exposure to adverse business, financial, or economic conditions.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals. Adverse market events and an inadequate management could affect with high probability the

company’s solvency.

CC

Risky

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the

company’s strong disequilibrium could increase.

CThe company shows considerable pathological situations. The company’s capacity to meet its financial

commitments is very low.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or

more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s

database etc.

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

Products MORE rating

Where AREA Science Park

34149 Trieste, via Padriciano 99 - ITALY

Info [email protected]

web www.modefinance.com

Phone +39 040 3755337

POWERWAVE-TECHNOLOGIES: modeFinance Credit Report

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