Alvarion® Reports Q1 2010 Results

Download Q1 10 Financials

Company begins implementing first phase of new strategic plan

Tel Aviv, May 4, 2010 — Alvarion Ltd. (NASDAQ:ALVR), the world’s leading provider of 4G WiMAX™ and wireless broadband solutions, today announced financial results for the first quarter of 2010.

Q1 Highlights:

Shipments of $47.9 million, a 5.9% sequential decline
Revenues of $51.9 million, a 13.8% sequential decline
GAAP net loss of ($0.08) per share; non-GAAP net loss of ($0.06) per share.

“Q1 results were within the range of our guidance and, as expected, reflect continued delays in several business catalysts,” said Eran Gorev, President and CEO of Alvarion. “Meanwhile, we continued the expansion of our business with several existing customers and made important progress toward securing several major projects in Asia Pacific, EMEA and North America. The timing of actual orders is difficult to anticipate, but we hope to see some impact from these developments in 2010. We are using the delay in the business catalysts to strengthen our capabilities in order to capture a larger share of the projects once the vendor selection processes move forward.”

In the first quarter of 2010, total revenues were $51.9 million, a decrease of 13.8% from $60.2 million in the fourth quarter of 2009, and a decrease of 23.5% from $67.9 million in the first quarter of 2009.

GAAP net loss in the first quarter of 2010 was ($4.9) million, or ($0.08) per share, compared to a net loss of ($1.3) million, or ($0.02) per share in Q4 2009. GAAP net loss in the first quarter of 2009 was ($0.8) million, or ($0.01) per share.
Excluding the amortization of intangibles, stock based compensation, restructuring and other charges, net, on a non-GAAP basis, the company reported net loss of ($3.7) million in the first quarter of 2010, or ($0.06) per diluted share, compared with non-GAAP net income of $0.7 million, or $0.01 per diluted share in the fourth quarter of 2009, and non-GAAP net income of $0.7 million, or $0.01 per diluted share in the first quarter of 2009.
Please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP for the first quarter of 2010 and the comparative periods.
Cash used in operations was ($9.1) million. As of March 31, 2010, cash, cash equivalents and investments totaled $103 million.

Strategic Initiatives

The company sees significant opportunities in the WiMAX carrier market as well as in the Enterprise space, and has recently completed an in-depth business review that is the basis for a set of near-term initiatives, including:

Continuing the transformation of the company toward becoming a full-fledged solution provider; in this context, adding professional services capabilities to capture a larger share of each project
Building key account teams to focus on larger end-to-end projects
Expanding local presence in key regions, including local manufacturing

In order to be able to adequately invest in these key initiatives, in long term strategic growth areas, and to improve our operating structure, the company has taken immediate action to reduce expenses by more than $30 million on an annual basis, with the intention of selectively reallocating some of the resources over the next several quarters. Most of the savings will come from an immediate headcount reduction of about 20%, which will be completed during Q2, resulting in a restructuring charge during the quarter.

Comments from Management

“After a thorough business review, we are moving decisively to implement a two-stage plan, continued Mr. Gorev. “First, we are transforming the organization, including our cost structure, into one that will best serve our near-term strategic business objectives. These changes will allow us to more effectively focus on the right opportunities, deliver end-to-end network solutions including professional services, and, in turn, capture a larger proportion of the total project dollars than we have in the past.

“The second stage of our plan will focus on positioning Alvarion for profitable growth in the increasingly complex multi-technology environment that will evolve over the next couple of years. We intend to complete the process and begin to implement the next phase of our plan during the second half of the year.”

Q2 2010 Guidance

The company indicated that there may be another sequential decline in revenues in Q2, and it has decided not to give detailed guidance, primarily because the timing of revenue from several large projects cannot be predicted with accuracy. Management continues to expect gradual improvement to begin during the second half of the year.

Alvarion management will host a conference call today, May 4, at 9:00 a.m. Eastern time to discuss the results and other matters.

Please call the following dial in number to participate:
USA: (800) 230-1074; International: +1(612) 234-9960.

The public is invited to listen to the live webcast of the conference call.
For details please visit Alvarion’s website at www.alvarion.com.
An archive of the online broadcast will be available on the website.

A replay of the call will be available from 11:00 a.m. EDT on May 4th, 2010 through 11:59 a.m. EDT on June 4th, 2010.

To access the replay, please call:
USA: (800) 475-6701
International: +1(320) 365-3844.

To access the replay, users will need to enter the following code: 150901.

Alvarion has scheduled dates for the earnings announcements during 2010 and this schedule is available on the website at http://www.alvarion.com/index.php/en/investors .

About Alvarion
Alvarion (NASDAQ:ALVR) is a global leader in 4G wireless communications with the industry’s most extensive customer base with hundreds of commercial WiMAX deployments. Alvarion’s industry leading solutions enable true open 4G and vertical applications for service providers and enterprises. Through an OPEN WiMAX strategy, superior IP and OFDMA know-how, and ability to deploy large scale end-to-end turnkey networks, Alvarion is delivering the true 4G broadband experience today (www.alvarion.com)

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations or beliefs of Alvarion’s management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: potential impact on our business of the current global recession, the inability of our customers to obtain credit to purchase our products as a result of global credit market conditions, the failure to fund projects under the U.S. broadband stimulus program, continued delays in WiMAX license allocation in certain countries; the failure of the market for WIMAX products to develop as anticipated; potential impact on our business of the current global recession;, Alvarion’s inability to capture market share in the expected growth of the WIMAX market as anticipated, due to, among other things, competitive reasons or failure to execute in our sales, marketing or manufacturing objectives; the failure of the Alvarion’s strategic initiatives to enable Alvarion to more effectively capitalize on market opportunities as anticipated; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to establish and maintain relationships with commerce, advertising, marketing, and technology providers and other risks detailed from time to time in the Company’s 20-F Annual Report Risk Factors section as well as in other filings with the Securities and Exchange Commission.
Information set forth in this press release pertaining to third parties has not been independently verified by Alvarion and is based solely on publicly available information or on information provided to Alvarion by such third parties for inclusion in this press release. The web sites appearing in this press release are not and will not be included or incorporated by reference in any filing made by Alvarion with the Securities and Exchange Commission, which this press release will be a part of.

You may request Alvarion's future press releases or a complete Investor Kit by contacting Kika Stayerman, This e-mail address is being protected from spambots. You need JavaScript enabled to view it or +972.3.767.4159.

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