DRWI on track for huge growth

Dragonwave is a company I have watched for several years. They produce very high speed microwave back-haul equipment. As cellular use of data grows their equipment helps operators handle the demand for data. The company was a world leader and did a huge early installation with a major US carrier that took their shares up to $7+. But then disaster struck for a small company with one major client. The company they worked for got into financial problems and halted roll out. Over time the shares of DRWI fell to about $1. They still had the worlds best solution, but the 2008 crash caused a big halt to capex world wide and caused all their potential clients to halt roll out of upgrades even though demand continued to grow.

Roll forward to this year and the CEO announced that they are now getting sales, in fact now they cut back so much to keep on going, they are getting a lot of orders that are making a huge impact. Growth this last qtr of over 25% and projected growth of at least 25-40% from now on. They have a large sale in India, and potential in Africa, and now that Capex is not a dirty word back in the USA Sprint is sniffing around looking for solutions.

The shares went up over 20% overnight on the announcement, and then today have fallen back 7% probably due to a lot of shareholders like me selling their stock after waiting 5 years! But sellers are foolish. This is the time to buy like crazy because once the second quarter confirms that this growth is real (and it will) then the shares will be back to $5-10 from $2 today!



Revenue for the first quarter of fiscal year 2015 was $28.8 million , compared with $17.9 million in the fourth quarter of fiscal year 2014 and $24.5 million in the first quarter of the fiscal year 2014. Revenue from the Nokia channel (formerly called Nokia Solutions and Networks) represented 61% of revenue in the first quarter of this fiscal year, versus 68% in the fourth quarter of fiscal year 2014 and 57% in first quarter of fiscal year 2014.

Gross margin for the first quarter of fiscal year 2015 was 20.5%, compared with 14.5% in the fourth quarter of fiscal year 2014 and 11.5% in the first quarter of fiscal year 2014.

Net loss applicable to shareholders in the first quarter of fiscal year 2015 was $6.6 million or ( $0.11 ) per basic and diluted share. This compares to a net loss applicable to shareholders of $11.6 million or ( $0.20 ) per basic and diluted share in the fourth quarter of fiscal year 2014 and a net loss applicable to shareholders of $6.6 million or ( $0.17 ) per basic and diluted share in the first quarter of fiscal year 2014.

"We are pleased that the increased demand that we observed in Q1 2015 is continuing into our second quarter. Momentum is such that we anticipate revenue growth between 25% and 40% relative to Q1," said DragonWave President and CEO Peter Allen .