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Alvarion reports inline first quarter results
[May 10, 2006]

Alvarion reports inline first quarter results


(Israel Business Arena Via Thomson Dialog NewsEdge)Wireless broadband solutions company Alvarion (Nasdaq: ALVR; TASE: ALVR) has reported first quarter revenue of $48.1 million, up 3% sequentially from $46.5 million in the fourth quarter of 2005. Revenue in the first quarter 2006 declined 16% from $57.2 million in the first quarter of 2005. The company said this primarily reflected a higher revenue contribution from one large customer during the first quarter of 2005.



Gross margin was 46% in the first quarter of 2006, exceeding the company's target gross margin of 45%.

On a GAAP basis, the company reported a net loss of $5.0 million, or $0.08 per share, compared with a net loss of $3.9 million, or $0.07 per share, in the fourth quarter 2005, and a net profit of $356,000, or $0.01 per basic and diluted shar,e in the first quarter of 2005. The net loss in Q1 2006 reflects the adoption of SFAS 123R ("Share-Based Payment") for the first time, and includes amortization of deferred stock compensation of $1.5 million, compared with $11,000 in the fourth quarter of 2005 and $530,000 in the first quarter of 2005.


Excluding amortization of acquired intangibles and deferred stock compensation and one time charges, on a non-GAAP basis, the first quarter 2006 net loss was $2.4 million, or $0.04 per share, compared with a net loss of $3.8 million, or $0.06 per share in the fourth quarter of 2005, and a non-GAAP net profit of $2.8 million, or $0.04 per diluted share in Q1 of 2005.

The revenue and non-GAAP loss per share figures are in line with analysts' estimates.

Alvarion president and CEO Tzvika Friedman said, "We are pleased with the continued sequential growth in the first quarter, particularly during a period that traditionally has been a seasonally weak quarter. This quarter we improved gross margin and significantly reduced our non-GAAP loss.

"We continue to lead the adoption of WiMAX. Since we introduced our BreezeMAX solution, it has generated over $50 million in revenue, many times the sales of other vendors' WiMAX products. In the first quarter, BreezeMAX again grew to reach 28% of our total revenue, compared with about 10% in the same period last year. With 55 commercial deployments and about 100 active trials, we are still at the very beginning of the adoption curve. "Revenue from our other broadband wireless solutions remained steady and we are continuing to expand our customer base in frequencies where there is no WiMAX profile and in the unlicensed bands.

"As a result of a disappointing level of orders in our cellular mobile unit so far in the second quarter, and our assessment of the outlook, we have decided to refocus the business to concentrate on generating positive cash flow, mainly from our GSM solutions, while supporting all current customers. We are beginning an analysis to determine the possible need for a certain non-cash charge in the second quarter for impairment of some of the intangible assets related to this business."

Alvarion's revenue guidance for the second quarter of 2006 is $48 million to $52 million. At this revenue range, non-GAAP per share results are expected to range between a loss of 2 and 5 cents per share. This guidance excludes expenses related to amortization of acquired intangibles, the effect of stock option expensing, and any possible one-time charges for the CMU business, if any. The company said that, since it was too early to indicate the impact of these charges, and whether or not certain of these charges will occur, it would not provide GAAP earnings per share guidance.

Published by Globes [online], Israel business news - www.globes.co.il - on May 10, 2006

Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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