POWERWAVE TECHNOLOGIES: PUMP UP THE VOLUME
At the end of sixth grade, Alfonso G. Cordero left his Mexico City school to work as an auto mechanic. He hated it, and spent most of his time daydreaming about life in the U.S., where his father lived. Cordero's impression of U.S. life came from Tom & Jerry cartoons--with their orderly homes and well-groomed lawns. When Cordero was 15, his daydreams came to life: His father brought him and two younger brothers, none of whom had English language skills, to Long Beach, Calif.
With such a rough start, anyone predicting that Cordero, now 57, would be living the American Dream would have been told they were confusing reality with Looney Tunes. But that's what Cordero is doing: His company, Powerwave Technologies Inc., racked up earnings of $7.6 million last year, a 70% rise, on revenues of $60 million, up 67%. That earned the Irvine (Calif.) maker of power amplifiers for cellular phones the No.5 spot on BUSINESS WEEK's list of Hot Growth companies.
Most of Powerwave's earnings come not from the U.S. but from South Korea, one of the first countries to implement a nationwide digital cellular phone system. Powerwave has 80% of the Korean market for power amplifiers, which boost the phone signals sent from so-called base stations and extend the talking range of cellular phones. The company's success there is no coincidence: A Powerwave engineer who is a Korean immigrant introduced Cordero to opportunities in his home market. Now, more than 80% of Powerwave's sales come from Korean companies, including LG Information & Communications and Hyundai Electronics Industries.
BIG CUSTOMERS. To diversify his customer base, Cordero is lining up deals with the big companies that will build digital cellular systems in the U.S. On Feb. 27, Powerwave inked a two-year purchasing agreement with BellSouth Cellular Corp. While some big infrastructure suppliers, such as L.M. Ericsson Telephone and Motorola, make their own power amps, many use outsiders. ''There's a lot of demand for these products with the buildout of the [wireless] infrastructure,'' says Eric Efron, co-manager of the San Antonio-based USAA Aggressive Growth Fund.
After finishing high school, Cordero was trained as an engineer by the U.S. Air Force. Later, he worked for a military subcontractor in Vietnam and an electronics company on Long Island. Once, on a job building ground-to-air base stations, Cordero needed power amplifiers. Horrified by their cost, he vowed to build a cheaper one. To do that, he started what is now Powerwave in 1985 with a since deceased partner who wouldn't leave California. So Cordero moved--while his wife kept her job with NCR Corp. in Hauppauge, N.Y., and commuted to California every other weekend.
After 10 years as chief executive, Cordero brought in professional management. ''As the company grew, we needed planning, and a better organization,'' says Cordero. ''I couldn't contribute that.'' Last year, he hired as CEO Bruce C. Edwards, ex-CFO of PC-maker AST Research Inc., and became chairman. Edwards took Powerwave public last December at 11 1/2, and the stock is now trading at about 19 5/8. Analysts think that 1997 earnings will increase another 58% this year, to $12 million, on sales up 55%, to $93 million.
But Cordero hasn't forgotten his roots. Of his 350 employees, more than half are immigrants, mostly from Vietnam. That's just fine with Cordero, who knows firsthand the lure of the American Dream. And he doesn't mind spreading it around.
By Larry Armstrong in Irvine, Calif.
Updated June 15, 1997 by bwwebmaster
Copyright 1997, Bloomberg L.P.