Or Yehuda, Israel, February 7, 2001 - Floware Wireless Systems Ltd.
(NASDAQ: FLRE), a leading provider of broadband wireless access (BWA)
communication systems, today announced results for the fourth quarter and
fiscal year ended December 31, 2000.
· Revenues for the quarter reached a record $17,556,000, up 50% from 3Q00
· Revenues for the full year grew to a record $38,477,000, up 1,057% from
· Gross margins for the quarter increased to 22% of revenues, up from 16%
· Proforma net loss per share for the quarter was $0.06 and for the year
· Selection by new major carriers during the quarter included the Abrared
Consortium in Spain, a large carrier in the Czech Republic and two leading
Chinese telecommunications operators
· Agreement with SCI Systems for turn-key production of indoor units
· New offices opened in Sao Paulo, Brazil and Prague in the Czech Republic
Revenues for the fourth quarter of 2000 increased to $17,556,000 from
$1,846,000 in the fourth quarter of 1999. Revenues rose by 50% in the
fourth quarter from $11,703,000 in the third quarter of 2000. Gross profit
for the fourth quarter 2000 was $3,812,000 or 22% of revenues, compared to
a gross loss of $196,000 in the fourth quarter of 1999. Gross profit in
the third quarter of 2000 was $1,856,000 or 16% of revenues.
Revenues for the year 2000 increased to $38,477,000 from $3,325,000 in
1999. Gross profit for the year 2000 reached $6,360,000, or 17% of
revenues, compared to a gross loss of $695,000 in 1999.
On a pro forma basis, which excludes $1,302,000 in amortization of
deferred stock compensation, net loss for the quarter was $1,939,000 or a
loss of $0.06 per share. This compares to a pro forma net loss for the
fourth quarter of 1999 of $2,691,000 or $0.11 loss per share and a pro
forma net loss in the third quarter of 2000 of $2,267,000 or a loss of
$0.07 per share. For the year 2000, pro forma net loss was $10,193,000 or
a pro forma net loss of $0.36 per share compared to a pro forma net loss
of $8,668,000 for the year 1999 or a pro forma net loss of $0.42 per
"I am delighted to report that Floware had an excellent fourth quarter
and, indeed, looking at the year as a whole, our performance has been
nothing short of exceptional," said Amnon Yacoby, CEO of Floware. "Our
achievements demonstrate Floware's ability to deliver on our strategy to
become the leading provider in the broadband wireless fixed access market.
We continued to grow and strengthen our relationships with carriers and
integrators, won major sales in key markets and continued to develop our
products to the highest standards. By all of these measures, Floware has
more than met its 2000 objectives and in the year ahead we expect to
continue to deliver outstanding results to our shareholders."
Research and development costs rose to $4,115,000 for the quarter,
compared to $1,747,000 for the fourth quarter in 1999 and $2,901,000 for
the third quarter in 2000. For the year 2000 research and development
costs increased to $11,440,000 compared to $5,558,000 in 1999. In
addition to continuing to develop the WALKair 3000 system and feature
enhancements to the WALKair 1000 system, Floware's R&D efforts focused on
reducing expenses associated with the WALKair 1000. To further reduce the
production cost of the WALKair 1000, Floware expects to introduce FPGA
masked chips by first quarter 2001 to replace the programmable chips
currently used. The Company is also continuing to develop ASIC chips
which will further reduce the production cost of terminal stations.
Floware also signed an agreement with SCI Systems, a leading EMS
(electronic manufacturing services) provider, to conduct turn-key
production of its terminal and base station indoor units which is expected
to further reduce production costs.
Sales and marketing expenses were $2,144,000 for the fourth quarter,
compared to $935,000 for the same period in 1999 and $1,542,000 for the
third quarter in 2000. Sales and marketing expenses for the year 2000
were $10,047,000 compared to $2,417,000 in 1999. The increase in expenses
reflects an increase in sales and marketing personnel, including the
expansion of the customer service group.
As of December 31, 2000, Floware's systems were deployed in 61
installations in 36 countries, including 35 commercial deployments.
Major wins in the quarter included two leading telecommunications
operators in China, a large carrier in the Czech Republic and the Abrared
Consortium in Spain.
In China, Floware was selected to supply its WALKair BWA system to two
leading telecommunications operators for commercial deployments. These
operators are both well established and well financed companies that are
currently deploying commercial networks. Floware has received initial
purchase orders for equipment for more than $6,000,000 and has already
shipped substantial amounts of product. These are important wins for
Floware as they give it a foothold in one of the largest markets in the
world with significant growth potential.
The Abrared Consortium of Spain has selected Floware's WALKair system for
its wireless network rollout throughout Spain. Spain, as one of the top
five European countries by population, is a large market for fixed
wireless systems. This win, along with Floware's previous selection by
FirstMark Spain, means that Floware is now the supplier of BWA systems to
two major carriers in Spain. In March 2000, the Abrared Consortium won a
3.5GHz license to provide fixed wireless access and is deploying a
nationwide wireless infrastructure throughout Spain. The system integrator
for Abrared, Lucent Technologies, has already placed purchase orders for
equipment of approximately $3.7 million. The Abrared Consortium comprises
six major Spanish companies and banks, including Iberdrola, the second
largest electrical power company in Spain, and Formus Communications
Iberica S.A., a leading global high-speed broadband services company.
In addition, Floware was awarded an order from a major carrier in the
Czech Republic. which was one of three operators that won a license for
the 26GHz frequency in the country in September 2000. This is Floware's
second selection as a BWA supplier in the Czech Republic, following its
earlier selection by Ceske Radiokomunikace.
During the fourth quarter Floware's existing customers continued to deploy
their networks and major deliveries included FirstMark and Arctel in
Germany, Abrared and FirstMark in Spain, Novis in Portugal, Ceske
Radiokomunikace in the Czech Republic, Rivizul in Uruguay and the two
carriers in China.
Other developments in the quarter included:
· An agreement with SCI Systems, a leading EMS provider, to conduct
turn-key production of the Company's indoor units for terminals and base
stations at its Scotland plant for all the radio frequencies that the
WALKair system supports. The outsourcing of indoor unit production to SCI
is an important component of Floware's strategy to reduce production
costs. SCI is scheduled to begin turn-key production in the third quarter
of 2001 and will reach full capacity production in the fourth quarter of
· Opening offices in Sao Paulo, Brazil and Prague in the Czech Republic.
Both offices are currently providing sales services and are expected to
provide technical support in the near future. Floware opened these
offices to support its strategic distribution partners in those markets as
well as its customers, the telecommunications carriers.
· Total number of permanent employees grew to 234 at December 31, 2000,
compared to 97 at the end of 1999 and 190 at September 30, 2000. Largest
growth was in R&D, adding 24 new engineers during the quarter and 75
during the course of the year, and sales and marketing, which added five
employees during the quarter for a total of 42 employees at the end of the
"We are very optimistic for the year ahead," said Yacoby. "We can count
on a well-established and high quality customer base. We will continue to
focus on the lucrative SME (small and medium enterprises) market segment
and we will continue to benefit from excellent global sales channels and
strong relationships with our partners. With this firm foundation in
place and by continuing to execute our strategy, we believe that we can
look forward to another successful year ahead for Floware."
CEO Amnon Yacoby and CFO Tali Idan will host a conference call today,
February 7, at 9:00 a.m. (Eastern) to discuss the results. To participate
in the call, please dial (913) 981-5507 ten minutes prior to the scheduled
call start time. A replay of the call will be available from 12:00 p.m.
(Eastern) on February 7 until midnight on February 14. To access the
replay, please dial (719) 457-0820 and enter code 790806.
Floware Wireless Systems Ltd. is a leading provider of point-to-multipoint
fixed broadband wireless access (BWA) systems. These systems are used
mainly by new carriers (CLECs) which connect business customers in the
"last mile." Floware's WALKair system enables carriers to provide
high-speed Internet access, as well as a wide range of voice and data
services, on the 3.5, 10.5 and 26 GHz radio frequency bands. Floware
currently has more than 60 deployments worldwide. For more information,
visit Floware's website at http://www.floware.com
This press release and statements by Floware in shareholder reports and
public filings, as well as in oral public statements by Floware´s
representatives may contain forward looking statements. Such statements
are subjected to certain facts, risks and uncertainties that may cause
actual results, events and performance to differ materially from those
referred to in such statements. The risks are identified in Floware´s
registration statement on Form F-1 (Registration Statement No. 333-12290)
filed with the Securities and Exchange Commission.
(Financial tables available on request)
For more information, please contact:
Floware Wireless Systems Ltd.
Tel: +972 3 5382209
Tel: +44 1753 790700
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