B) Life is a BRZE
Rated a BUY
Business
BreeezeCom is a leading developer and manufacturer of wireless access products used worldwide by service providers and private enterprises. Incorporating internally developed core technologies optimized for high-speed data, most products use spread spectrum radio transmission, digital signal processing and wireless packet switching technology. BreezeCom has three product lines: BreezeACCESS for service providers in licensed and unlicensed frequency bands, BreezeNET for wireless campus networks in unlicensed bands and BreezeLINK for point-to-point T1/E1 connectivity.
BreezeCOM has over 300 employees worldwide, over 30% of which are in R&D. BreezeCOM's corporate headquarters are based in Tel-Aviv Israel, and its North and South America Headquarters located in Carlsbad, CA. The company is also present in the UK, France, Canada, Uruguay, Hong Kong, China, Russia and Romania. BreezeCOM has developed an extensive distribution network, which includes over 300 partners and distributors in more than 60 countries worldwide.
Competitors
WAVC, NTRO
News
TEL AVIV, Israel & CARLSBAD, Calif.--(BUSINESS WIRE)--July 31, 2000--
- $24.5 Million Revenues, 139% Year-Over-Year Increase
- 57% Sequential Revenue Growth
- $2.6 Million Net Income
BreezeCOM Ltd. (NASDAQ: BRZE), a leading developer and manufacturer of broadband wireless access products, today announced record revenues for the second quarter ended June 30, 2000, its first profitable quarter.
Revenues for the second quarter were $24.5 million, a 139 percent increase over revenues of $10.3 million reported in the second quarter of 1999, and a 57 percent increase over first quarter 2000 revenues of $15.6 million. Net operating income for the second quarter of 2000 was $807,000, compared with an operating loss of $(969,000) in the same period in 1999, and a loss of $(414,000) in the first quarter of 2000. The Company reported net income of $2.6 million, or $0.08 per diluted share, compared with a net loss of $(1.5 million), or $(0.14) per diluted share, in the second quarter of 1999, and a net loss of $(256,000), or $(0.01) per share, for the first quarter of 2000.
31-Jul-00 BEFORE THE OPEN
BreezeCOM (BRZE) 31 7/8: Reports Q2 earnings of $0.08 a share, $0.06 better than the First Call consensus of $0.02; revenues rose 138.5% to $24.50 mln from a year-ago of $10.27 mln;
14-Jul-00 AFTER THE CLOSE
BreezeCOM (BRZE) 46 +5 1/2: -- Update -- Company files to offer 4.3 mln shares in a secondary offering.
14-Jul-00 14:00 -- 15:00 ET
BreezeCOM (BRZE) 45 1/4 +4 3/4: Announces it expects Q2 sales of $24.5 mln vs $10.3 mln in the year-ago period; expects earnings of $2.5 mln vs a net loss of $1.5 mln; First Call estimate is $0.02 per share;
23-Mar-00 13:34 ET
Breezecom (BRZE) 40 1/2 +20 1/2: --Update-- IPO opens for trading.
Analysts and Others
Midcoast Wireless is a division of Rockland, Maine Internet Service Provider Midcoast Internet Solutions. The parent company delivers the usual dialup services as well as ISDN (although since most people who are close enough to a phone-switching office for ISDN are also close enough for ADSL, which is less expensive and many times faster, one imagines ISDN will go away).
What Midcoast Wireless is offering is, essentially, a wireless LAN on a broader scale. You put an Ethernet card in your computer, connect it to a BreezeCom radio transmitter, and that communicates with one of eight antenna or repeater broadcast sites. They're in Camden, Owl's Head, Rockport, and Union. Towns close by, like Thomaston, are also served. Monthly costs can be much less than T1 and the company claims performance similar to other broadband methods. So you get a fast connection that requires no wiring and no additional costs (phone lines, etc.). And since BreezeCom made its name developing communication systems to keep tanks in the Israeli army connected during battle, you know reliability should be acceptable.
digitalmass.com
A typical business customer sees the payback vs. a leased line in a matter of three to six months. MIS has found that most customers who think they need a T1 really only need the speed of that T1. Wireless access provides all the advantages of increased speed without having to pay the high price of dedicated service.
Using BreezeCOM’s wireless LAN technology has also enabled MIS to generate additional savings in its own operation. It has replaced several internal leased lines with wireless links, reducing its monthly phone bills by literally thousands of dollars, while at the same time increasing system reliability. MIS envisions its entire internal network will one day be wireless. The company believes it can “cut the cord” and create redundant wireless links within its network for less cost than what it is currently paying for leased lines.
comnews.com
(Article on competitor, but highlights technology)
"For outdoor shows it is wonderful [since] the alternative is to string cable, and that is not practical when you have a large audience," Muth said. Recently, for example, IcebergMedia organized a Webcast of a Red Hot Chili Peppers show from downtown Toronto. To string cable would have been time-consuming and dangerous with so many people walking around, he said.
So Muth rigged up the Internet connection for his Webcast event by positioning the wireless bridges used by the WaveRider LMS product. It is a line-of-sight solution, which means the devices have to have a clear path to communicate. But, Muth said, it takes a minute to set up and works in good weather or bad.
Like Leyva, Muth stumbled across the wireless networking option when his firm was moving to a new building and discovered it could not get other types of broadband Internet access in the new digs for at least three months. To solve that dilemma, the company connected to its previous location through LMS. It was a roundabout way to get speedy access to the Net, but it worked. As a result of his experience, Muth is constantly thinking about how he can use wireless technology to expand his business.
For Muth's vision to come true, broadband wireless-based services will have to become more widely available. But that's beginning to happen as carriers start building out their networks and wireless ISPs (Internet service providers) jump on board. One such wireless ISP, North Rock Communications Ltd., in Hamilton, Bermuda, began offering customers Internet access using the WaveRider LMS equipment out of necessity. zdnet.com.
Wireless Internet - It's A Breeze
by Dale Baker back
Everywhere you go, you hear the buzz – wireless Internet is taking the world by storm. The Europeans have been sending E-mail from their hand-held Nokia and Ericsson phones for more than a year, while Palm Pilots and Research In Motion’s (Nasdaq: RIMM) Blackberry portables are going fully interactive in the US. All the major wireless players are jumping on board.
How you can profit from the trend? Start with a little known Israeli company called BreezeCOM (Nasdaq: BRZE). BreezeCom IPO’ed on March 23 when the tech market was just starting to crumble. The drop from the high 40’s to a low under 20 didn’t win BRZE too many fans. Too bad, because BRZE is exactly the kind of small cap tech stock you want to own in today’s rebounding market. How would you like to buy a successful company for $37 per share with the potential to go up 50-100%? Would you like it even better if you knew that insiders still own 92% of the stock and mutual funds already own more than half the 2 million shares sold in the IPO?
That’s a recipe for a vertical liftoff if BRZE continues to execute. BRZE sells a variety of wireless systems like their BreezeNET line, which allows corporations to set up wireless LANs. According to IDC, BRZE already dominates the building-to-building wireless bridging market for networks with a 49% share. More important, the new BreezeACCESS family lets ISP’s offer instant wireless access to their customers. How many ISP’s worldwide will need to add wireless service in the next few years? Thousands.
A quick look at some of BreezeCOM’s customers shows how wide their appeal has become – Broadlink, CAIS Internet, Tele2 in the UK, WiBand Communications in Canada and Lina.Net in Iceland. One nationwide US ISP followed their initial $12 million order with another $6.7 million order for additional BreezeCOM equipment. An ISP owner in Connecticut had nothing but praise for the BreezeCOM equipment he is currently deploying. “It is good equipment…about the best out there for ISP’s. Every ISP I talk to that uses them, speaks very highly of not just the products, but also the BreezeCOM engineers that stand behind the product. Outstanding service.” BRZE recently introduced the MMDS (Multichannel Multipoint Distribution Services) version of its BreezeACCESS line. Users get up to 3Mbps speeds for data and voice. The MMDS line uses both Time Division Duplex (TDD) and Frequency Hopping – Code Division Multiple Access (FH-CDMA) to make the most of the available spectrum.
This is state of the art stuff. One conversation can bounce around multiple channels as the data load requires, without the user ever noticing. A recent report by the Phillips Group noted that most big companies contemplating a wireless network are insisting on VOIP (Voice Over Internet Protocol), essentially a blend of data and voice where a traditional conversation is reduced to digital packets and switched through the network like regular Internet transmissions, instead of tying up a single voice circuit for the whole conversation. The company gets mobile voice communications and data traffic on the same network. Thanks to BreezeACCESS, that is.
The system is also scalable in size and quality of service. BreezeACCESS offers Quality of Service prioritizing for voice traffic over data packets and Toll Quality Telephony based on the H.323 Voice over IP protocol. ISP’s can start small if they like, then adding premium quality services without having to revamp their whole network. OK, BRZE has terrific products and a growing list of satisfied customers. But is this company another money-losing dot.com wannabe with huge losses and no hopes of turning a profit for years? Nope. The three analysts with Strong Buy ratings on the stock project profitability this year. Last quarter, BRZE beat estimates by .03 and only lost a penny. Dig further and you find that 90% of the operating expenses (after cost of sales) were devoted to R&D and marketing. General administrative overhead was only 9% of the gross profit and 5% of gross revenues. Toss in the $4.86 per share in cash and no debt and you have a sterling balance sheet for a young tech company. First quarter sales came in at $15 million, yielding an annualized price-sales ratio of about 15 for a company that grew revenues 46% year over year and 22% sequentially. If BRZE maintains 20% sequential growth, annual revenue would come in at $80 million for a current PS ratio of only 10.
PSINet (Nasdaq: PSIX) also believes in BRZE evidenced by their direct investment in the BRZE IPO. PSIX has more than 50,000 business customers in the aerospace, finance, communications, computer data processing and related industries, government agencies and educational and research institutions, as well as other Internet service providers. Guess which wireless solutions PSIX will recommend to all those customers? BreezeACCESS and BreezeNET. CEO Michael Rothenberg noted that most of BRZE’s growth is coming from the ISP customers who contribute 50% of the company’s revenues. Overall, outdoor point-to-multipoint fixed installations make up 80% of business while wireless LANs for enterprises make up 20%. Often, CEO statements are full of hype. But there is plenty of proof to back up Rothenberg’s claims. “With our strong financial position, leading-edge technology and wide product offerings, we believe that BreezeCOM will consolidate its leadership position in the broadband wireless access market.” I couldn’t agree more. I expect BRZE to double from its current price in the next twelve months.
streetsideinvestor.com
16-Jun-00 USB Piper Jaffray Reiterated - Strong Buy
16-May-00 USB Piper Jaffray Reiterated - Strong Buy 03-May-00 USB Piper Jaffray Reiterated - Strong Buy 25-Apr-00 USB Piper Jaffray Reiterated - Strong Buy
17-Apr-00 USB Piper Jaffray Initiated - Strong Buy
17-Apr-00 11:00 -- 12:00 ET
BreezeCOM (BRZE) 23 1/8 -1 7/8: -- Update -- Dain Rauscher Wessels initiates coverage with a STRONG BUY rating and price target of $41. Breezecom Ltd. is a leader in low-cost, low frequency point to multipoint solutions. Brokerage firm initiating coverage participated in underwriting the recent IPO.
17-Apr-00 11:00 -- 12:00 ET
BreezeCOM (BRZE) 23 3/8 -1 5/8 : CIBC Wrld Mkts initiates coverage with a STRONG BUY rating and price target of $50. Brokerage firm initiating coverage participated in underwriting the recent IPO.
Numbers
Rev 12.7M to 15.6M to 24.5M Jun00 per dailystocks
EPS (0.05) to (0.01) to 0.08 per breifing.com Jun00
52-Week Low on 24-Apr-2000 $19.25
Recent Price $32.313
52-Week High on 18-July-2000 $53.125
Market Capitalization $815.6M
Shares Outstanding 25.2M
Float 2.00M
Price/Book (mrq*) 6.29
Price/Earnings N/A
Price/Sales (ttm) 9.26
Debt/Equity (mrq*) 0
Total Cash (mrq) $108.6M
Short Interest As of 10-July-2000
Shares Short 168.0K
Percent of Float 8.4%
Shares Short (Prior Month) 64.0K
Insiders
One buy and no sells, but this IPO lockup hasn’t occurred.
Institutions own 10% up from 3% the prior quarter.
Internet posts
I grow weary of talking about how much I love these last mile broarband wireless infrastrucure plays....but I do - I'm stymied that they are sitting where they are...from the recent IPO's to BRZE to the former DMIC I like them all - Honestly I haven't seen a more blatently opportune time to but a sector in ages.
The weird thing is that the Nokia and handset sell-off precipitated the sell-off on the group.....but they are completely UNRELATED - If I wasn't a short term trader, I'd buy a little of the whole group and just sit on them for a year or two. 8/16/00 on SI
First NTRO and BRZE's products do not overlap today because NTRO's products operate in the frequency bands of 10GHz and above, whilst BRZE's operate in the bands of 4GHz and below. This makes BRZE's per user cost today significantly lower so for the same revenue they have sold a lot more kit.
Secondly NTRO are only one actor not the first mover. I don't believe they have reported a real sale in Europe yet, whilst Alcatel have announced deals worth $300 mln in the last month, a high proportion of which is actually rebadged BRZE.
Third, Alcatel and I believe Ericsson have gone the BRZE route.
7/31/00 on Yahoo
anyone know why brze is valued at 1/3 the price of ntro.. ??? we have more revenue .. positive earnings.. I know a couple of fund managers have really pushed ntro. Seems odd they haven't done the same with brze.. I just bought more breeze at 34. couldnt resist.. 7/31/00 on Yahoo
Sequential revenue growth will be 66%, which translates into annualized growth of 759%.
The company has scalable model: loss of 200k on revenues of 15 mln and net income of 2.5 mln on revenues of 25 mln.
Scalable means, that earnings should grow fasted than revenues. It means that the company might as well double its net income by the next quarter.
For those who are bitching about the secondary --- need I remind you that JNPR had a secondary too. PHCM had one. FLSH had one.
the fact that insiders are selling in the seconday in the orderly manner means the following:
1. they won't be selling when lock up expires
2. underwriters have no problems placing the shares since all the secondaries are pre-subscribed.
7/30/00 on Yahoo
I've been seeing the excitement around Wi-LAN's 30 Mbps but if you take a deeper look into it you see the following:
Wi-LAN's 30 Mbps is nada, since it uses 10 MHz of band.
The thing is, wireless equipment needs to have a good spectral efficiency (i.e., bits/sec/Hz).
Wi-LAN only now introduces (and i'm not sure the product is avaliable) 30 Mbps in 10 MHz which gives 3 bits/sec/Hz.
BRZE has for more then 4 years in the market (BreezeNET) 3 Mbps in 1 MHz which gives, guess what, 3 bits/sec/Hz.
BRZE is speaking about OFDM and is probably planning a much better OFDM solution then what Wi-LAN is doing.
7/28/00 on yahoo
Secondary Priced @$35 yesterday. I don't know why it hasn't been announced. 7/28/00 on yahoo
Perhaps one of the best apples to apples comparisons can be done with WAVC.
ADAP, Wi-LAN, and many others just build part of the pieces. Breezecom and WaveRider offer complete lines of solutions to ISPs and businesses. Breezecom and WaveRider both offer LAN connectivity to the internet.
Cisco doesn't have a solution on the market yet, other than its wireless LANs, although its pushing to get some products out.
Lucent's Orinoco solution is basically a mobile type solution, where people can get internet access while roaming within a small covered area, like a university.
On earnings, nobody else preannounced that earnings would come in 400% above estimates. :)
7/27/00 on yahoo
Wi-LAN does 32 Mbps - NOW.
Breezecom does only 11Mbps..
If you are into BRZE you are buying a future consumer of WIN.TO's patented technology - end of story
7/21/00 on yahoo
Somebody please explain why current shareholders should not be extremely disappointed in the latest news regarding the follow-on offering... I'm not techinical enough to understand all the details, but it seems like it's money out of our respective pockets? 7/14/00 on RB
While Breezecom sells in this market, they outsource the hardware, as do many of the other players in the list. The article is also the result of lab testing, as opposed to real world field testing, and is specifically addressing the LAN requirement of the hardware, and the focus of BreezeCOM is in the ISP/Last Mile area. It is regrettable that they chose to not test these in real world conditions, as their results would have likely been extremely different, especially in the presense of any other DSSS hardware.
In summary, while the review is OK for the LAN segment, it has little to nothing to do with the the existing and future market for BreezeCOM. Over 1000 ISPs use BreezeCOM gear, and most of them are using the FHSS products, not the DSSS units. 7/11/00 on yahoo
BRZE sells a variety of wireless systems like their BreezeNET line, which allows corporations to set up wireless LANs. According to IDC, BRZE already dominates the building-to-building wireless bridging market for networks with a 49% share. More important, the new BreezeACCESS family lets ISP’s offer instant wireless access to their customers. How many ISP’s worldwide will need to add wireless service in the next few years? Thousands. 49% of the wireless radio building to building market. And wireless has already begun to take off like a rocket. The next two years for wireless is going to be amazing! 7/5/00 on RB
Breezecom is on fire - 23% sequential revenue growth last quarter, MAKING MONEY, an IPO that was oversubscribed by 15 times. 6/27/00 on RB
"What would keep aironet/csco from developing FHSS and stomping all over BRZE with their distribution/money/service/etc.?" Nothing, except Cisco doesn't "develop"anything anymore.
They just buy the companies that make the technology they want. So your worry should be "what do we do if Cisco decides to come along and throw money at us until we are drowning and have to beg them to please stop shoveling the cash higher and higher...". 6/26/00 on yahoo
My ISP in rural Illinois is using brze products for wireless also. If we wait for the phone company to bring us high speed it will be a very long wait! 6/22/00
I did look into Waveriders products about 6 months ago. This was before they even had their products available for sale. I understand that they are going to release something this quarter, or may have already released it. Their technology uses Direct Sequence Spread Spectrum (DSSS), whereas the new Breezecom gear uses Frequency Hopping Spread Spectrum (FHSS).
We have pretty much decided to use the FHSS gear because of its robustness in areas where their could be a lot of interference and its high level of security. 3/31/00 on SI
Chart
Two biggest day in the last three months were red, Tracks the Nasdaq fairly well. Went from $52 to $32 in two weeks of July. Very tight stack 50/200/10.
breezecom.com
Summary
A hidden gem. A profitable wireless tech company. 138% rev increase per breifing,com, 100 for present P/E so it not overpriced Small float make this difficult to hold when runups occur. Some silly knocks on owning stocks from Israel. Owned ECIL in the early 1990’s and did well. Just have to pay the foreign tax on Israel stocks. Downside is $10 and upside is $20 short term by next quarter. A must through earnings, because an upside will send it higher. Momentum players left in the tech drop in July so Monday is good as any for an entry. Better sales, marketcap, and balance sheet than for WAVC.
Jack |
