Press Releases

BreezeCOM Ltd. Reports Second Quarter 2001 Results

TEL AVIV, Israel/CARLSBAD, CA, July 26th, 2001 – BreezeCOM (NASDAQ: BRZE), a leading provider of high-speed wireless access solutions, today announced financial results for the second quarter ended June 30, 2001.

Revenues for the second quarter ended June 30, 2001 were $22.4 million, a decrease of 8.5 percent compared with revenues of $24.5 million for the second quarter ended June 30, 2000. Excluding the inventory write-off described below, pro forma net loss for the second quarter was $(1.6) million, or $(0.06) per basic and diluted share, compared with net income of $2.6 million, or $0.08 per diluted share, for the second quarter ended June 30, 2000.

Revenues for the six months ended June 30, 2001 were $46.3 million, an increase of 16 percent over revenues for the same period last year of $40.1 million.

Pro forma basic and diluted loss per share for the six months ended June 30, 2001 was $(0.05), compared with diluted earnings per share of $0.08 for the same period last year.

Pro forma net loss for the second quarter of 2001 excludes an inventory charge of $16.4 million for the write-off of excess inventory and an additional $3.0 million provision for inventory purchase commitments. Including these charges, net loss for the quarter was $21.0 million, or $(0.72) basic and diluted loss per share.

As previously announced, on June 2001 Breezecom listed its shares on the Tel Aviv Stock Exchange (TASE), BreezeCOM’s shares began trading today.

Zvi Slonimsky, President and CEO of BreezeCOM, stated, “We believe that our results reaffirm our strategy and underscore the leading position Breezecom has established in the fixed broadband wireless market. While many telecom and datacom equipment vendors have continued to report significant declines in both sequential and year-over-year revenues, we have been able to keep our revenue base relatively stable. We have built BreezeCOM’s business on a solid foundation consisting of a diversified group of customers, both in terms of geography as well as type of operator. This diversity once again proved its worth in the second quarter as we drew upon customers throughout the world -in North and South America, Europe and Asia - in order to achieve our sales levels. In addition, the fact that a significant portion of our shipments was generated by repeat orders underscores the viability of our market.”

Mr. Slonimsky added, “In light of our lower revenues and current market conditions, we are implementing cost-cutting measures with the goal of reducing our operating expenses, including the layoff of 15% of our workforce. These savings will begin to impact our results as early as the third quarter, and their full effect will be felt during the fourth quarter of 2001.”

Mr. Slonimsky also announced that Mr. Amir Rosenzweig was nominated as President of BreezeCOM’s U.S. subsidiary. Mr. Rosenzweig, served for the last two years as President and Chief Executive Officer of MTS Inc. Amir brings with him significant experience in management and marketing that will assist him in taking our U.S. operations to the next step. Mr. Bernard Herscovich, is leaving BreezeCOM Inc. to pursue other interests. Mr. Slonimsky said, “I would like to take this opportunity to thank Bernard for his major contribution in building BreezeCOM as a leading BWA player in the U.S.”

Mr. Slonimsky concluded, “The pending merger with Floware will create a leading global provider of point-to-multipoint broadband wireless access equipment. I am happy to report that our joint efforts to plan the integration of BreezeCOM and Floware are progressing well and according to our timetable. With over $200 million in cash and cash equivalents, the combined company will be an extremely strong market contender. Managements of both companies are very excited and confident that they are forming a leading broadband wireless access equipment supplier in the market.”

Floware and BreezeCOM will hold a joint conference call today, July 26, 2001, at 9:00 a.m. EDT. To participate in the call, please dial (877) 715-5317 from inside the U.S., or (973) 628-9554 from outside the U.S., ten minutes prior to the scheduled start time. A replay of the conference call will be available from approximately 11:00 a.m. (EDT) on July 26th until 11:59 p.m. EDT on July 28th. To access the replay, please dial (877) 519-4471 (inside the U.S.), or (973) 341-3080 (outside the U.S.) and enter authorization code 2725996. This call will be available as a Webcast on www.breezecom.com and www.streetevents.com. In addition, a transcript of this call will be available following the call on www.breezecom.com.

About BreezeCOM
BreezeCOM is a 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.

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