Prospectus Summary
This summary highlights information found elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider before investing in our common stock. Before deciding to invest in our Class A common stock, you should read the entire prospectus carefully, including "Risk Factors" and our financial statements and the notes to those financial statements included elsewhere in this prospectus.
Western Multiplex Corporation We are a global provider of broadband, or high-speed, wireless access systems that enable service providers, businesses and other enterprises to deliver data, voice and video services. We believe our fixed wireless systems address the growing need of our customers and end-users to rapidly and cost- effectively deploy high-speed communication networks. During the last eight years, we have developed proprietary technologies that have enabled us to introduce what we believe are some of the fastest, longest range and most reliable broadband wireless systems available, including our Lynx DS-3, currently the industry's fastest license-exempt wireless system.
Our systems operate in both the licensed and license-exempt portions of the radio frequency spectrum. Our Lynx and Tsunami systems enable direct, or point- to-point, fixed wireless communication between two locations. Our Lynx systems are primarily used by wireless operators to connect their base stations to other base stations and to existing wire line networks. Our Tsunami systems are primarily used by service providers, businesses and other enterprises to expand or establish private networks carrying Internet traffic among multiple facilities. Our Ubiquity point-to-multipoint systems, which are currently under development, will enable service providers, businesses and other enterprises to connect multiple facilities within a geographic area to a central hub.
We serve the global broadband wireless access market by selling our systems to service providers, businesses and other enterprises directly through our sales force and indirectly through distributors, value-added resellers and systems integrators. In 1999, we sold our systems to 480 customers in 34 countries. Our customers include AT&T Wireless Group, Bell Atlantic Corporation, GTE Corporation, Motorola Inc., Nextel Communications, Inc., Pacific Bell and Voicestream Wireless Corporation.
Over the past decade, the amount of broadband data transmitted across communications networks has grown significantly due to the increased use of the Internet and bandwidth-intensive applications, which created an increase in demand for cost-effective, high-speed communications. In addition, deregulation in many countries has created an opportunity for new service providers to offer broadband data, voice and video services. Although there are a number of alternatives that deliver high-speed connections through existing wire line technologies, these solutions are often expensive and time consuming to install or unavailable. As a result, service providers, businesses and other enterprises are increasingly looking to high-speed wireless technologies to address the limitations of wire line solutions.
Our broadband wireless access systems are used in a variety of applications in different markets, including:
. Wireless operator infrastructure. Our wireless systems enable cellular and personal communication service providers to connect their base stations to other base stations and to existing wire line networks.
. Fiber extension. Our systems enable service providers to extend the reach of the fiber backbone with products that combine the high transmission speeds and reliability of fiber optic cable with the flexibility, cost effectiveness and rapid deployment of wireless technologies.
. Campus and other private networks. Our systems enable enterprises with multiple facilities, including those located in a campus environment, to connect their facilities to expand or establish private networks.
. Last mile access. Our systems connect end-users with a service provider's central office, providing high-speed last mile access.
Our objective is to be a leading global provider of broadband wireless access systems. Our strategy to accomplish this is to:
. Capitalize on our technology expertise to rapidly introduce new products;
. Utilize existing customer relationships to expand into new market segments;
. Increase our presence in international markets;
. Aggressively market through distributors, value-added resellers and systems integrators; and . Expand through acquisitions.
Our principal executive offices and manufacturing facilities are located at 1196 Borregas Avenue, Sunnyvale, California 94089. Our telephone number is (408) 542-5200. The predecessor to our company was originally incorporated in California on December 17, 1979. On November 1, 1999, the predecessor merged into Western Multiplex Corporation, a Delaware corporation, with Western Multiplex Corporation as the surviving entity in the merger.
The Offering
Except as otherwise noted, the term "common stock" throughout this prospectus means our Class A common stock, which will be our only class of common stock outstanding upon completion of the offering.
Common stock offered.............. shares Common stock outstanding after shares the offering......................
Use of proceeds................... We expect to use a portion of the net proceeds from the offering to repay outstanding indebtedness. We intend to use the remainder of the net proceeds of the offering primarily for general corporate purposes, including working capital, expansion of our engineering organization, product development programs, sales and marketing capabilities, and general administrative functions and capital expenditures, as well as acquisitions.
Proposed Nasdaq National Market symbol............................ "WMUX" The number of shares of common stock to be outstanding after the offering is based on the number of shares of common stock outstanding as of March 31, 2000. This number excludes:
. 4,578,227 shares of common stock that we may issue upon the exercise of options outstanding as of March 31, 2000 at a weighted average exercise price of $.54 per share;
. 4,370,000 shares of common stock that we may issue upon the exercise of warrants outstanding as of March 31, 2000 at a weighted average exercise price of $.50 per share, all of which will be exercisable on the date of the offering.
Unless otherwise indicated, all information contained in this prospectus:
. assumes no exercise of the underwriters' option to purchase up to additional shares of common stock to cover over-allotments, if any;
. reflects the automatic conversion at a one-to-one ratio of all outstanding shares of our Class B common stock into shares of Class A common stock immediately prior to the completion of the offering; and . reflects the initial public offering price of $ per share, the mid- point of the initial offering price range per share set forth on the cover of this prospectus.
Some of the financial data contained in this prospectus reflects the effect of rounding.
Summary Financial Data The summary financial data below should be read together with "Capitalization," "Selected Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the notes to those financial statements appearing elsewhere in this prospectus.
Years Ended December 31, 1995 1996 1997 1998 1999 (unaudited) (unaudited) (in thousands, except share and per share data)
Income Statement Data: Revenue................. $ 18,259 $ 28,012 $ 32,108 $ 32,903 $ 44,750 Cost of revenue......... 8,749 12,270 16,039 17,703 22,470 Gross profit............ 9,510 15,742 16,069 15,200 22,280 Income from operations.. 2,315 7,513 6,039 3,553 7,524 Recapitalization costs.. -- -- -- -- (3,050) Net income.............. $ 1,751 $ 5,944 $ 4,096 $ 2,168 $ 1,240 Basic and diluted earnings per share..... $ .02 $ .07 $ .05 $ .03 $ .02 Shares used to compute basic and diluted earnings per share..... 80,000,000 80,000,000 80,000,000 80,000,000 73,000,000
December 31, 1999 Pro Forma Actual As Adjusted (in thousands) Balance Sheet Data: Cash........................................................ $ 1,913 $ Working capital............................................. 4,627 Total assets................................................ 43,322 Long-term debt less current portion......................... 19,153 Total stockholders' equity.................................. 11,152 The pro forma as adjusted balance sheet data reflects (1) the acquisition by us of Ubiquity Communication, Inc. on March 24, 2000 and (2) our sale of shares of common stock in the offering at an initial public offering price of $ per share, the mid-point of the initial price range per share set forth on the cover of this prospectus, after deducting the underwriting discount, estimated offering expenses payable by us, and the receipt and application of the net proceeds from the offering. See "Use of Proceeds."