BreezeCOM Ltd. Reports First Quarter 2001 Results

Business & Technology Editors  
TEL AVIV, Israel and CARLSBAD, Calif.--(BUSINESS WIRE)--May 1,  
2001--BreezeCOM (NASDAQ:BRZE), a leading provider of high-speed 
wireless access solutions, today announced financial results for the 
first quarter ended March 31, 2001.  
Revenues for the first quarter ended March 31, 2001, were $23.9 
million, an increase of 53% compared with revenues of $15.6 million 
for the first quarter ended March 31, 2000. Net income for the first 
quarter was $63,000, compared with a net loss of $(256,000) for the 
same period in 2000. For the first quarter, diluted earnings per share 
was $0.00, compared with a $(0.01) loss per share for the first 
quarter ended March 31, 2000.  
Zvi Slonimsky, President and CEO of BreezeCOM, stated, "Although 
we were affected by the abrupt downturn in the U.S. market, our 
ongoing geographic diversification efforts continued to help us by 
lowering our dependence on U.S. sales. While U.S. market conditions 
were difficult, our sales in Europe, Latin America and Southeast Asia 
went according to our business plan. In these regions, we have 
continued to successfully deploy 3.5GHz, unlicensed and MMDS 
networks."  
"We continue to focus on product development that addresses 
continuously evolving market requirements. During the quarter, we 
announced our new Orthogonal Frequency Division Multiplexing ("OFDM") 
product lines. The OFDM line delivers higher speeds and extends our 
market reach by enabling service providers to address medium to large 
enterprises. We also use the same OFDM technology for the network 
backbone. Providing higher speed and improved spectral efficiency, the 
new BreezeACCESS OFDM products also deliver better non-line-of-sight 
operation with robust resistance to multi-path and other types of 
interference."  
"This quarter, we cemented our partnership with a very important 
Japanese wireless ISP, SpeedNet Corporation, which, following 
extensive trials over the past year, placed an initial multi-million 
dollar order for BreezeACCESS II equipment. SpeedNet, the result of a 
joint venture between Tokyo Electric Power Co., Softbank and 
Microsoft, is planning an extensive wireless network and has the 
potential to become one of the largest ISPs in the world. This initial 
order is scheduled for delivery throughout year 2001.  
"In order to strengthen and diversify our client base, we are 
expanding our focus and operations in selected markets which show 
increased telecommunication expenditure. One such market is that of 
cellular operators. Our broadband wireless access products allow 
cellular operators to capitalize on their existing cellular 
infrastructures by utilizing their existing towers, backbone networks, 
client bases and wireless expertise to provide broadband services. 
During the past six months, we have also targeted rural telephone 
companies, i.e., the incumbent telephone companies in rural or remote 
locations which have begun deploying our products to provide 
high-speed Internet services."  
"In keeping with a continued focus on international markets during 
the recent downturn in the U.S. economy, we too have directed our 
marketing and sales efforts in this direction. We announced last 
quarter the opening of a marketing and support office in Frankfurt, 
Germany. This office will support sales by OEM, distribution and 
system integrators in Germany."  
"The pending merger with Floware, announced at the beginning of 
last month, will create the leading global provider of 
point-to-multipoint broadband wireless access equipment. We have 
continued our joint efforts to plan the integration of BreezeCOM and 
Floware, and I am happy to report this work is progressing well and 
according to our timetable. Work is being done by several groups 
addressing all business aspects, which we believe will lead to 
increased efficiency and economies of scale. The merger is on track 
for closure in the third quarter of 2001. BreezeCOM is now stronger 
than ever and, with the Floware merger, the new entity will become an 
even more formidable force in our market with the ability to better 
serve our customers, investors and employees. Management of both 
companies continue to be extremely excited at the opportunity this 
merger will provide us to become the global leader in this fast 
growing market."  
About BreezeCOM  
BreezeCOM (NASDAQ:BRZE) is the leading provider of Broadband 
Wireless Access (BWA) solutions used by service providers and 
enterprises. Its products provide a wireless alternative to wired 
access solutions, such as DSL and cable modems, and facilitate indoor 
and outdoor, as well as fixed and mobile wireless LAN connectivity. 
BreezeCOM products are based on a packet switching point-to-multipoint 
wireless platform, optimized for high-speed Internet and intranet 
access. Core technologies include spread spectrum radio, digital 
signal processing, modems, networking protocols and VLSI. For more 
information on BreezeCOM, please visit www.breezecom.com.  
BreezeACCESS is a trademark of BreezeCOM, Inc. All other trade 
names are the properties of their respective owners. This press 
release contains forward-looking statements that are subject to risks 
and uncertainties. Factors that could cause actual results to differ 
materially from these forward-looking statements include, but are not 
limited to, general business conditions in the industry, changes in 
demand for products, the timing and cancellation of orders and other 
risks detailed from time to time in BreezeCOM's filing with the 
Securities and Exchange Commission, including BreezeCOM's Form F-1.  
This release and prior releases are available on the KCSA Public 
Relations Worldwide Web site at www.kcsa.com.  


                            BREEZECOM LTD. 
 
                CONDENSED CONSOLIDATED BALANCE SHEETS 
                      U.S. dollars in thousands 
 
                               March 31,             December 31, 
                                 2001                    2000 
                              ----------             ------------ 
                              (Unaudited)             (Audited) 
ASSETS 
 
CURRENT ASSETS: 
Cash and cash equivalents     $  32,879              $    6,580 
Marketable securities           110,222                 118,706 
Trade receivables                18,830                  19,129 
Other accounts receivable  
  and prepaid expenses            5,747                   8,411 
Inventory                        57,138                  44,254 
                              ---------              ---------- 
Total current assets            224,816                 197,080 
                              ---------              ---------- 
 
Long term Investments: 
  Marketable Securities          13,517                  44,801 
  Other long-term investment      3,500                   3,500 
  Severance pay fund              1,492                   1,334 
                              ---------              ---------- 
Total long-term investments      18,509                  49,635 
 
PROPERTY AND EQUIPMENT, NET       7,263                   6,122 
                              ---------              ---------- 
Total assets                  $ 250,588              $  252,837 
                              =========              ========== 
 
LIABILITIES AND  
SHAREHOLDERS' EQUITY 
 
CURRENT LIABILITIES 
 
Trade payables                $  14,926              $   21,395 
Other accounts payable  
  and accrued expenses           18,698                  15,892 
                              ---------              ---------- 
Total current liabilities        33,624                  37,287 
                              ---------              ---------- 
ACCRUED SEVERANCE PAY             3,515                   3,055 
                              ---------              ---------- 
 
SHAREHOLDERS' EQUITY: 
Share capital - 
Ordinary shares of NIS 0.01  
par value: 
  Authorized: 85,080,000  
  shares as of March 31,2001  
  and December 31, 2000;  
  Issued and outstanding:  
  28,817,664 shares as  
  of March 31, 2001 and  
  28,130,320 as of  
  December 31, 2000                  79                      78 
 
Additional paid-in capital      218,874                 217,984 
Accumulated deficit              (5,504)                 (5,567) 
                              ---------              ---------- 
Total shareholders' equity      213,449                 212,495 
 
Total liabilities and  
  shareholders' equity        $ 250,588              $  252,837 
                              =========              ========== 
 
 
 
                            BREEZECOM LTD. 
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
           U.S. dollars in thousands (except per share data) 
 
                                  Three Months Ended March 31, 
                                     2001            2000 
                                  ----------      ----------- 
                                  (Unaudited)     (Unaudited) 
 
Sales                             $ 23,891         $  15,591 
Cost of sales                       13,727             8,255 
                                  --------         --------- 
Gross profit                        10,164             7,336 
                                  --------         --------- 
Operating expenses: 
Research and development, net        4,179             2,257 
Selling and marketing, net           7,132             4,670 
General and administrative           1,308               823 
Total operating expenses            12,619             7,750 
                                  --------         --------- 
Operating loss                      (2,455)             (414) 
Financial income, net                2,518               158 
                                  --------         --------- 
Net income (loss) for the period  $     63         $    (256) 
                                  ========         ========= 
 
Basic earning (loss) per share    $   0.00         $   (0.01) 
                                  ========         ========= 
 
Weighted average number of  
  shares used in computing  
  basic earnings (loss)  
  per share                         28,328            19,426 
                                  ========         ========= 
Diluted earnings (loss)  
  per share                       $   0.00         $   (0.01) 
                                  ========         ========= 
 
Weighted average number of  
  shares used in computing  
  diluted earnings (loss)  
  per share                         31,845            19,426 
                                  ========         ========= 

 
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