Subject: [NEXTEL-1] interWAVE Announces Fourth-Quarter and Fiscal Year 2003 Results:

From: [email-masked]
Date: Thu, 07 Aug 2003 02:43:30 -0400

GO interWAVE!

interWAVE Announces Fourth-Quarter and Fiscal Year 2003 Results:

-  Sales increased 29 percent quarter-over-quarter while gross margins improved by
17 percentage points to 44 percent
-  Combined R&D and SG&A expenses decreased slightly compared to Q3'03 and 43%
compared to Q4'02, reduced to $6.8 million for the quarter
-  Net reduction in combined cash balances of $0.8 million for the quarter
decreased 82 percent compared to Q3'03 and for the year decreased 62 percent
compared to Q4'02
-  An additional $2.4 million in customer payments and prepayments dated or
initiated June 30th or earlier received in the first three days of
July 2003

MOUNTAIN VIEW, Calif., Aug. 6 /PRNewswire-FirstCall/ -- interWAVE(R)
Communications International, Ltd. (Nasdaq: IWAV), a pioneer in compact wireless
voice communications systems, today announced financial results for the fourth
fiscal quarter and the year ended June 30, 2003.  For the quarter, the Company
reported total revenues of $8.5 million, up 29 percent compared to $6.6 million in
the prior quarter and up 17 percent compared to $7.2 million for the fourth
quarter last year.  The Company reported a net loss of $7.8 million (which
included restructuring charges of $4.3 million), or $(1.16) per share, compared to
a net loss of $5.5 million (which included restructuring charges of $0.1 million),
or $(0.81) per share, for the prior quarter and $39.0 million (which included
restructuring charges of $1.1 million), or $(6.97) per share for the fourth
quarter last year.  Net losses per share have been retroactively adjusted for a
one-for-ten reverse stock split effected April 30, 2003.
Several large orders that were expected to close during the third quarter, which
were delayed due to finalization of customer letters of credit, closed as expected
during the fourth fiscal quarter. Such large orders, aggregating more than $3
million, were closed in the fourth quarter.  For the year ended June 30, 2003, the
Company reported revenues of $30.0 million, compared with revenues of $43.0
million for fiscal 2002. The Company reported a net loss of $30.9 million or
$(4.75) per share, compared with a net loss of $64.3 million, or $(11.52) per
share, for fiscal 2002.  William E. Gibson, Chairman of the Board of Director's
Executive Committee of interWAVE, commented, "The last two years have been
particularly challenging for interWAVE as the economy and the overall business
climate has deteriorated, but we believe we have appropriately re-sized the
company, modestly increased sales in the fourth quarter and significantly reduced
our operating expenses and cash utilization. Our diligence has resulted in a 33
percent reduction in spending on combined research and development and SG&A in the
last year and a 44 percent reduction in total operating expenses in the last year.
Moreover, we have continued to focus on increasing our market presence, resulting
in a 17 percent increase in sales for the fourth quarter compared to the fourth
quarter of last year, despite a challenging economic climate and political
tensions in several of our markets." For the quarter, combined research and
development (R&D) and selling, general and administrative (SG&A) expenses declined
to $6.8 million.  This compares with combined R&D and SG&A expenses of $7.2
million in the third quarter and $11.9 million for the comparable fourth quarter
last year.  During the quarter, 59 percent of revenue resulted from contracts with
new customers. The Company recorded sales to 14 new customers during the fourth
quarter, compared to five in the third quarter and 17 during the previous three
quarters combined. Of total fourth quarter revenue, 58 percent came from the
Company's Europe, Middle East and Africa region, 17 percent was from the Asia
Pacific region, 23 percent was from the Company's North America region, and 2
percent was from Latin America.
Cal Hoagland, senior vice president and chief financial officer, added, "Follow-on
business with existing customers continues to be an important aspect of our
revenue mix, especially as customers deploy our technology and realize the revenue
possibilities which our products create. However, I am especially pleased with the
frequency of new orders from entirely new customers recorded during the quarter.
This trend could lead to increased follow-on business in coming quarters."
Net cash burn for the quarter was $0.8 million, comprising the combined reduction
of cash and cash equivalents, short-term investments and restricted cash.  An
additional $2.4 million in customer payments and prepayments dated or initiated
June 30, 2003 or earlier were received in the first three days of July 2003, and
were not included in the Company's combined cash balances at June 30, 2003 or the
calculation of net cash burn for the quarter.  This compares to a net cash burn of
$4.4 million for the third quarter and $3.1 million for the fourth quarter of
fiscal 2002. The corresponding GAAP financial information and a reconciliation
from net cash burn to GAAP is contained in the attached financials, and available
on the Investor Relations section of the Company's website at http://www.iwv.com.
The Company's combined cash balances at the end of June 2003 were $4.6 million,
comprising cash and cash equivalents, short-term and long-term restricted cash.
During the quarter, the Company entered into, and drew down upon, a line of credit
extended by Silicon Valley Bank.
Management's Teleconference To Be Held Wednesday August 6, 2003 interWAVE
management's teleconference will be held Wednesday August 6, 2003 at 1:15 p.m. PT
/ 4:15 p.m. ET, and will be webcast live for all investors.  Interested parties
can access the call by dialing (877) 858-9308 or by accessing the web cast at
http://www.iwv.com. A replay of the call will be available at (706) 645-9291,
access number 1870950 for 3 days following the call. To listen to the webcast or
its replay, go to the Investor Relations page of the interWAVE Communications site
at http://www.iwv.com and click on the webcast link.
The Company interWAVE Communications International, Ltd. (Nasdaq: IWAV) is a
global provider of compact network solutions and services that offer innovative,
cost-effective and scalable networks allowing operators to "reach the unreached."
interWAVE solutions provide economical, distributed networks that minimize capital
expenditures while accelerating customers' revenue generation.  These solutions
feature a product suite for the rapid and simple deployment of end-to-end compact
cellular systems and broadband wireless data networks that deliver scalable IP,
ATM broadband networks.  interWAVE's portable, mobile cellular networks and
broadband wireless solutions provide vital and reliable wireless communications
capabilities for customers in over 50 countries.  The Company's U.S. subsidiary is
headquartered at 2495 Leghorn Street, Mountain View, California, and can be
contacted at http://www.iwv.com or at (650) 314-2500.
Editor's Note:  interWAVE is a registered trademark of interWAVE Communications
International, Ltd.
Forward Looking Statements
This news release contains forward-looking statements that are subject to known
and unknown risks and uncertainties that could cause the results of interWAVE
Communications International, Ltd. to differ materially from management's current
expectations. These risks and uncertainties include, but are not limited to, the
risks relating to interWAVE's history of losses, the expectation of future losses,
potential lack of liquidity and capital resources, reliance on a small number of
customers, ability to close orders that have been delayed from prior fiscal
quarters, complexity of products, difficulties in introducing new or enhanced
products, compliance with regulations and evolving industry standards, long sales
cycles, intense competition, management of global operations, the ability to
retain and motivate key employees, the potential of delisting from the Nasdaq
National Market, and acquisition related risk factors including potential asset
impairment, dilution of shares outstanding, cash outflow for acquisitions,
increases in debt absorbed and potential post-acquisition employee retention, as
well as the Risk Factors discussed in the filings and reports made from time to
time by interWAVE with the Securities and Exchange Commission.

interWAVE Communications International, Ltd.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts - Unaudited)

Three Months Ended             Year Ended
June 30,                   June 30,
2003         2002         2003          2002

Total revenues          $8,475        $7,248      $29,960       $42,955
Total cost of revenues   4,739        15,159       21,679        38,206

Gross profit / (loss)    3,736        (7,911)       8,281         4,749

Operating expenses
Research and
development           2,789         4,496       13,737        19,793
Selling, general
and administrative    3,963         7,442       19,113        29,163
6,752        11,938       32,850        48,956
Deferred stock compensation expense     --            (2)         194
(227)
Amortization of
intangible assets       271         1,470          931         6,085
Losses (gains) on
asset impairments
and sales                83        16,657         (144)       16,657
Restructuring charges
(credits)             4,324         1,086        5,039        (1,986)
4,678        19,211        6,020        20,529

Total operating
expenses           11,430        31,149       38,870        69,485

Loss from operations    (7,694)      (39,060)     (30,589)      (64,736)

Interest income
(expense), net            (81)          125            1         1,056
Other expense, net        (112)         (168)         (53)         (436)

Net loss before income taxes           (7,887)      (39,103)     (30,641)
(64,116)
Income tax (expense)
/ benefit                  89           130         (267)         (209)

Net loss               ($7,798)     ($38,973)    ($30,908)     ($64,325)

Net loss per share,
basic and diluted --
Post 10 for 1 reverse
split -- Note 1        ($1.16)       ($6.97)      ($4.75)      ($11.52)

Weighted average
common shares
outstanding, basic
and diluted Post 10
for 1 reverse split
-- Note 1               6,748         5,592        6,508         5,583

interWAVE Communications International, Ltd.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts - Unaudited)

Three Months Ended
June 30,       March 31,
2003           2003

Total revenues                                    $8,475         $6,580
Total cost of revenues                             4,739          4,821

Gross profit                                       3,736          1,759

Operating expenses
Research and development                         2,789          3,253
Selling, general and administrative              3,963          3,933
6,752          7,186

Deferred stock compensation expense                 --             79
Amortization of intangible assets                  271            108
Losses (gains) on asset impairments and sales       83           (332)
Restructuring charges                            4,324             79
4,678            (66)

Total operating expenses                        11,430          7,120

Loss from operations                              (7,694)        (5,361)

Interest expense, net                                (81)           (44)
Other income (expense), net                         (112)            85

Net loss before income taxes                      (7,887)        (5,320)

Income tax (expense) / benefit                        89          (139)

Net loss                                         ($7,798)       ($5,459)

Net loss per share, basic and diluted --
Post 10 for 1 reverse split -- Note 1           ($1.16)        ($0.81)
Weighted average common shares
Outstanding, basic and diluted
Post 10 for 1 reverse split -- Note 1             6,748          6,733

interWAVE Communications International, Ltd.
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)

June 30,       June 30,
2003           2002 Assets:
Current assets:
Cash, cash equivalents and
short-term investments --
Note 2 (including restricted cash,
current portion)                               $4,478        $15,682
Trade receivables, net                           6,584         10,034
Inventory, net                                   8,661         13,665
Prepaids and other current assets                2,421          3,509
Total current assets                          22,144         42,890

Restricted cash, long term portion -- Note 2       147            684
Property and equipment, net                      4,321          6,999
Intangible assets, net                           7,991          1,660
Other assets                                       118            394
Total assets                                 $34,721        $52,627

Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable                                $5,324         $7,972
Accrued expenses                                 7,295          4,577
Accrued compensation                             2,289          3,534
Income taxes payable                               417            268
Accrued restructuring expenses                   3,469            782
Deferred revenue                                 2,080          2,283
Advance customer payments                        1,567             --
Short-term borrowings                            1,000             --
Current portion of notes and leases payable        586            562
Total current liabilities                     24,027         19,978

Other long term liabilities                      2,284          2,502
Total liabilities                             26,311         22,480

Shareholders' equity:
Common stock, net                              339,327        329,437
Accumulated deficit                           (329,555)      (298,647)
Other                                           (1,362)          (643)
Total shareholders' equity                     8,410         30,147

Total liabilities and
shareholders' equity                        $34,721        $52,627

interWAVE Communications International, Ltd.
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)

June 30,       March 31,
2003            2003 Assets:
Current assets:
Cash, cash equivalents and
short-term investments --
Note 2 (including restricted
cash, current portion)                         $4,478         $4,718
Trade receivables, net                           6,584          4,332
Inventory, net                                   8,661          9,693
Prepaids and other current assets                2,421          2,469
Total current assets                          22,144         21,212

Restricted cash, long term portion -- Note 2       147            687
Property and equipment, net                      4,321          5,305
Intangible assets, net                           7,991          8,314
Other assets                                       118            301
Total assets                                 $34,721        $35,819

Liabilities and Shareholders' Equity:
Current liabilities:
Accounts payable                                $5,324         $5,107
Accrued expenses                                 7,295          5,950
Accrued compensation                             2,289          1,336
Income taxes payable                               417            422
Accrued restructuring expenses                   3,469             34
Deferred revenue                                 2,080          2,115
Advance customer payment                         1,567            400
Short-term borrowings                            1,000             --
Current portion of notes and leases payable        586            622
Total current liabilities                     24,027         15,986

Other long term liabilities                      2,284          3,088
Total liabilities                             26,311         19,074

Shareholders' equity:
Common stock, net                              339,327        339,324
Accumulated deficit                           (329,555)      (321,757)
Other                                           (1,362)          (822)
Total shareholders' equity                     8,410         16,745

Total liabilities and shareholders' equity   $34,721        $35,819

interWAVE Communications International, Ltd.
Notes to Condensed Consolidated Financial Statements (In thousands, Unaudited)

Note 1 -- Reverse Stock Split
The condensed consolidated financial statements for the three-month and fiscal
year ended June 30, 2003 and 2002 have been retroactively adjusted for a 10 for 1
reverse stock split effective April 30, 2003.
Note 2 -- Combined Cash Balances and Net Cash Burn
Combined cash balances comprise cash and cash equivalents, short-term investments
and restricted cash.Net cash burn comprises the combined reduction of cash and
cash equivalents, short-term investments and restricted cash.
June 30,       June 30,
Quarterly Cash Burn                           2003           2002 Combined cash
balances at beginning of quarter:
Cash and cash equivalents                       $4,718        $10,003
Short-term investments                              --          7,760
Restricted cash, current portion                    --            866
Restricted cash, long term portion                 687            813
Combined cash balances at
beginning of quarter                         5,405         19,442
Combined cash balances at end of quarter:
Cash, cash equivalents and
short-term investments                          4,371         11,403
Short-term investments                              --          2,849
Restricted cash, current portion                   107          1,430
Restricted cash, long term portion                 147            684
Combined cash balances at end of quarter       4,625         16,366

Net cash burn for the quarter                       $780         $3,076

June 30,      June 30,
Annual Cash Burn                                   2003          2002 Combined
cash balances at beginning of year:
Cash and cash equivalents                      $11,403        $25,974
Short-term investments                           2,849         20,012
Restricted cash, current portion                 1,430          1,489
Restricted cash, long term portion                 684             --
Combined cash balances at beginning of year   16,366         47,475

Combined cash balances at end of year:
Cash, cash equivalents and
short-term investments                          4,371         11,403
Short-term investments                              --          2,849
Restricted cash, current portion                   107          1,430
Restricted cash, long term portion                 147            684
Combined cash balances at end of year            4,625         16,366

Net cash burn for the year                       $11,741        $31,109

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