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Alvarion Reports First Quarter 2007 ResultsTEL AVIV, Israel --(Business Wire)-- Alvarion Ltd. (NASDAQ: ALVR), the leading provider of WiMAX and wireless broadband solutions, today announced financial results for the first quarter ended March 31, 2007. Highlights: -- Positive momentum continued with revenues of $52.1 million; -- 10 customers with over $1 million in revenue each; -- Non-GAAP EPS of $0.02; GAAP loss per share of ($0.01); -- Gross margin of 51%; -- Shipped BreezeMAX 802.16e platform to over 20 customers; -- Record BreezeMAX revenues of $25 million; In the first quarter of 2007, revenues increased to $52.1 million, a 4% increase from $50.3 million in the fourth quarter of 2006 and a 19% increase from $43.6 million in the first quarter of 2006. BreezeMAX revenue in Q1 2007 was approximately $25 million, 48% of total revenue, compared to about $24 million in Q4. GAAP net loss in the first quarter of 2007 was ($623,000), or ($0.01) per share, which included income from discontinued operations of $436,000. Net loss from continuing operations was ($1.1) million or ($0.02) loss per share, compared to a loss from continuing operations of ($282,000), or ($0.00) per share in Q4. The increased loss was mainly a result of additional investment in WiMAX and the effects of currency fluctuations. Loss from continuing operations in the first quarter of 2006 was ($574,000), or ($0.01) per share. Excluding discontinued operations, amortization of acquired intangibles and deferred stock compensation, on a non-GAAP basis, the company reported a net profit of $1.3 million, or $0.02 per diluted share, compared with a non-GAAP net profit of $2.1 million, or $0.03 per diluted share in the fourth quarter of 2006, and a non-GAAP net profit of $1.5 million, or $0.02 per diluted share in Q1 2006. The company generated positive cash flow from operating activities of approximately $4 million during Q1 2007. Cash reserves as of March 31, 2007 totaled approximately $120 million, up from $118.4 million in the previous quarter. For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results of continuing and discontinued operations, see the attached table showing the detailed reconciliation of GAAP to non-GAAP results for Q1 2007 and the comparative quarters. Comments from Management "We are pleased by the momentum of Q1," said Tzvika Friedman, President and CEO of Alvarion. "Strong BreezeMAX shipments of approximately $33 million and a sequential revenue increase during a quarter that is typically affected by seasonal weakness, show the impact of the growth drivers we've been pointing to, as well as good execution by our team. "The demand for WiMAX, particularly in emerging markets, is growing and at the end of Q1, we had more than 150 commercial deployments among satisfied customers generating revenue from WiMAX services. We also had about 220 active trials, many of them with operators interested in deploying mobile WiMAX. Our 4Motion solution is among the most advanced in the industry and we achieved several important technical milestones during Q1. These included initial interoperability with numerous devices using embedded chipsets from a variety of vendors in preparation for certification of 802.16e systems. We also demonstrated mobile TV over WiMAX at CTIA and, together with Intel, we conducted the first live demo of Matrix B MIMO using their new WiMAX chip for the Centrino platform." Q2 2007 Guidance The company's revenue guidance for Q2 2007 is $53 to $57 million. Based on this revenue range, non-GAAP per share results from continuing operations are expected to range between $0.00 and $0.03. GAAP per share results are expected to range between ($0.00) and $(0.03). Alvarion's management will host a conference call today, May 2, at 9:00 a.m. Eastern time to discuss the quarter. To participate in the call, please dial one of the following numbers approximately five minutes prior to the scheduled start time: USA: (612) 332-0637, International: +1 (612) 332-0637. 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 on-line broadcast will be available on the website. A replay of the call will be available from 11:45 a.m. ET on May 2, 2007 through 11:59 p.m. ET on May 9, 2007. 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: 869335. About Alvarion With more than 3 million units deployed in 150 countries, Alvarion (www.alvarion.com) is the world's leading provider of innovative wireless broadband network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP video and other services. Alvarion is leading the market to Open WiMAX solutions with the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. Alvarion's products enable the delivery of personal mobile broadband, business and residential broadband access, corporate VPNs, toll quality telephony, mobile base station feeding, hotspot coverage extension, community interconnection, public safety communications, and mobile voice and data. As a wireless broadband pioneer, Alvarion has been driving and delivering innovations for over 10 years from core technology developments to creating and promoting industry standards. Leveraging its key roles in the IEEE and HiperMAN standards committees and experience in deploying OFDM-based systems, the Company's prominent work in the WiMAX Forum is focused on increasing the widespread adoption of standards-based products in the wireless broadband market and leading the entire industry to Open WiMAX solutions. 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: the failure of the market for WIMAX products to develop as anticipated; 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; 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. You may request Alvarion's future press releases or a complete Investor Kit by contacting Esther Loewy, Investor Relations: [email protected] or +972.3.767.4476.
ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (*)
U.S. dollars in thousands (except per share data)
Three Three Three
Months Months Months
Ended Ended Ended Year Ended
March March December December
31, 31, 31, 31,
-------- -------- ---------- ----------
2007 2006 2006 2006
-------- -------- ---------- ----------
Sales $ 52,077 $ 43,623 $ 50,267 $ 181,594
Cost of sales 25,801 22,086 24,308 89,882
-------- -------- ---------- ----------
Gross profit 26,276 21,537 25,959 91,712
-------- -------- ---------- ----------
Operating expenses:
Research and development,
net 11,774 8,761 10,868 38,807
Selling and marketing 12,644 10,273 12,589 44,929
General and administrative 3,913 3,076 3,412 13,680
Amortization of intangible
assets 636 669 669 2,676
-------- -------- ---------- ----------
Total Operating expenses 28,967 22,779 27,538 100,092
-------- -------- ---------- ----------
Operating loss (2,691) (1,242) (1,579) (8,380)
Financial income, net 1,632 668 1,297 3,796
-------- -------- ---------- ----------
Loss from continuing
operations (1,059) (574) (282) (4,584)
-------- -------- ---------- ----------
Income (loss) from
discontinued operations,
net 436 (4,394) (5,961) (36,167)
-------- -------- ---------- ----------
Net loss $ (623) $ (4,968) $ (6,243) $ (40,751)
-------- -------- ---------- ----------
Basic and Diluted net
earnings (loss) per
share:
Continuing operations $ (0.02) $ (0.01) $ (0.00) $ (0.08)
Discontinued operations $ 0.01 $ (0.07) $ (0.10) $ (0.59)
Total $ (0.01) $ (0.08) $ (0.10) $ (0.67)
======== ======== ========== ==========
Weighted average number of
shares used in computing
basic and diluted net
earnings (loss) per share 61,767 60,192 61,266 60,841
======== ======== ========== ==========
(*) Results of Cellular Mobile Unit that was sold in November 2006,
are classified as discontinued operations and are not included in the
results from continuing operations for 2007 and 2006.
ALVARION LTD.& ITS SUBSIDIARIES
RECONCILIATION BETWEEN GAAP TO NON-GAAP STATEMENT OF INCOME (*)
U.S. dollars in thousands (except per share data)
Three Three
Months Months
Ended Ended
March 31, December 31,
2007 2006
------------------------------------------------
GAAP Adjustments Non-GAAP Non-GAAP
------- ------------ -------- ------------
Sales $52,077 $ - $ 52,077 $ 50,267
Cost of sales 25,801 (134) (a) 25,667 24,173
------- ------------ -------- ------------
Gross profit 26,276 134 26,410 26,094
------- ------------ -------- ------------
Operating expenses:
Research and
development, net 11,774 (393) (a) 11,381 10,474
Selling and
marketing 12,644 (399) (a) 12,245 12,199
General and
administrative 3,913 (827) (a) 3,086 2,632
Amortization of
intangible assets 636 (636) (b) - -
------- ------------ -------- ------------
Total operating
expenses 28,967 (2,255) 26,712 25,305
------- ------------ -------- ------------
Operating profit
(loss) (2,691) 2,389 (302) 789
Financial income,
net 1,632 - 1,632 1,297
------- ------------ -------- ------------
Income (loss) from
continuing
operations (a) (1,059) 2,389 1,330 2,086
------- ------------ -------- ------------
Income from
discontinued
operations, net 436 (436) - -
------- ------------ -------- ------------
Net income ( loss) $ (623) $ 1,953 $ 1,330 $ 2,086
------- ------------ -------- ------------
Basic net earnings
(loss) per share:
Continuing
operations $ (0.02) 0.02 $ 0.03
======== ============
Discontinued
operations $ 0.01
Total $ (0.01)
=======
Weighted average
number of shares
used in computing
basic net earnings
(loss) per share 61,767 61,767 61,266
======= ======== ============
Diluted net earnings
(loss) per share:
Continuing
operations $ (0.02) $ 0.02 $ 0.03
======== ============
Discontinued
operations $ 0.01
Total $ (0.01)
=======
Weighted average
number of shares
used in computing
diluted net
earnings (loss) per
share 61,767 63,942 63,865
======= ======== ============
(*) Results of Cellular Mobile Unit that was sold in November 2006,
are classified as discontinued operations and are not included in the
results from continuing operations for 2007 and 2006.
(a) The effect of stock-based compensation. The Company adopted the
provisions of Statement of Financial Accounting Standards No. 123R,
"Share-Based Payment" on January 1, 2006 using the modified-
prospective transition method.
(b) The effect of amortization of intangible assets.
ALVARION LTD.& ITS SUBSIDIARIES
DISCLOSURE OF NON-US GAAP NET INCOME
FOR COMPARATIVE PURPOSES NET INCOME AND EARNINGS PER SHARE FROM
CONTINUING OPERATIONS EXCLUDING AMORTIZATION OF ACQUIRED INTANGIBLES,
DEFERRED STOCK COMPENSATION AND INCOME (LOSS) FROM DISCONTINUED
OPERATIONS
U.S. dollars in thousands (except per share data)
Three Three Three
Months Months Months
Ended Ended Ended Year Ended
March 31, March 31, December 31, December 31,
---------- ---------- ------------ ------------
2007 2006 2006 2006
---------- ---------- ------------ ------------
Net loss according
to US GAAP $ (623) $ (4,968) $ (6,243) $ (40,751)
Amortization of
acquired current
technology and
customer
relationships 636 669 669 2,676
Amortization of
deferred stock
compensation 1,753 1,424 1,699 6,450
Loss (income) from
discontinued
operations (436) 4,394 5,961 36,167
---------- ---------- ------------ ------------
Net Income from
continuing
operations
excluding
amo
ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31, December 31,
2007 2006
--------- ------------
ASSETS
Cash, cash equivalents, short-term and long-
term investments $ 119,922 $ 118,426
Trade receivables 36,515 34,332
Other accounts receivable 12,088 12,474
Inventories 37,438 30,539
Severance pay fund 9,210 8,749
PROPERTY AND EQUIPMENT, NET 10,782 10,379
GOODWILL AND OTHER INTANGIBLE ASSETS 60,607 61,243
DISCONTINUED ASSETS 3,361 3,921
--------- ------------
TOTAL ASSETS $ 289,923 $ 280,063
---------------------------------------------- ========= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 27,565 $ 22,418
Other accounts payable and accrued expenses 45,004 42,295
--------- ------------
Total current liabilities 72,569 64,713
----------------------------------------------
ACCRUE
ALVARION LTD.& ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Three
Months Ended
March 31, 2007
---------------
Cash flows from operating activities:
Net loss $ (623)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation 785
Amortization of deferred stock compensation 1,753
Amortization of intangibles assets 636
Increase in trade receivables (2,183)
Decrease in other accounts receivable and prepaid
expenses 367
Increase in inventories (6,899)
Increase in trade payables 5,394
Increase in other accounts payables and accrued
expenses 4,434
Accrued severance pay, net 391
Net income from discontinued operations (436)
---------------
Net cash provided by operating activities from
continuing operations 3,619
Net cash provided by operating activities from
discontinued operations 395
---------------
Net cash provided by operating activities 4,014
===============
Cash flows from investing activities:
Purchase of fixed assets (1,435)
---------------
Net cash used in investing activities from continuing
operations (1,435)
===============
Cash flows from financing activities:
Proceeds from exercise of employees' stock options 642
Repayment of long term liability (1,725)
---------------
Net cash used to financing activities from continuing
operations (1,083)
===============
Increase in cash, cash equivalents, short-term and
long-term investments from continuing operations 1,101
Increase in cash, cash equivalents, short-term and
long-term investments from discontinued operations 395
---------------
Increase in cash, cash equivalents, short-term and
long-term investments 1,496
===============
Cash, cash equivalents, short-term and long-term
investments at the beginning of the period 118,426
---------------
Cash, cash equivalents, short-term and long-term
investments at the end of the period $ 119,922
===============
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