Alvarion Reports Q3

TEL AVIV -- Alvarion Ltd. (NASDAQ:ALVR), the world’s leading provider of WiMAX™ and wireless broadband solutions, today announced financial results for the third quarter ended September, 30, 2009.

Business highlights include:

• Selected as vendor to Clearwire International
• Implementing turnkey projects in U.S., Taiwan, Italy and Kenya
• Two new customer wins through expanded NSN partnership
• Introduced outdoor macro base station and WiMAX solution for license exempt frequencies

• Returned to Non-GAAP Profitability in Q3 and Year-to-Date Results
• Revenues stable sequentially
• GAAP net loss of ($0.02) per share; Non-GAAP net income of $0.00 per share
• WiMAX shipments down 4% sequentially to $37.5 million, reflecting project delays
• WiMAX revenues down 10% sequentially to $40.5 million
• Order pattern continues gradual improvement

GAAP net loss in the third quarter of 2009 was ($1.0) million, or ($0.02) per share, compared to net loss of ($4.0) million, or ($0.06) per share in Q2 2009. GAAP net income in the third quarter of 2008 was $0.8 million, or $0.01 per share.

Excluding the amortization of intangibles, stock based compensation expenses and other charges, net, on a non-GAAP basis, the company reported net income in the third quarter of 2009 of $0.2 million, or $0.00 per diluted share, compared with non-GAAP net loss of ($0.6) million, or ($0.01) per diluted share in the second quarter of 2009, and non-GAAP net income of approximately $3.0 million, or $0.05 per diluted share in the third quarter of 2008. Please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP for the third quarter of 2009 and the comparative periods.

Cash used in operations was ($4.7) million. As of September 30, 2009, cash, cash equivalents and investments were $125 million.

Comments from Management

“We achieved non-GAAP breakeven results on approximately the same level of revenues as the second quarter, as a result of higher gross margin from a favorable revenue mix combined with our success in improving operating leverage,” said Tzvika Friedman, president and CEO of Alvarion. “Our challenge in Q3 related mainly to the impact on revenues of regulatory delays in making spectrum available and the tight credit environment which slowed the pace of some deployments. Meanwhile, fundamental demand remains robust, the WiMAX ecosystem is expanding, and operators are experiencing subscriber growth. As a result, operators’ interest in our solution is also growing, and we continue to be encouraged by the gradual improvement in order intake.

“We expect a similar quarter in Q4, followed by a gradual recovery which is expected to begin during the first half of 2010 based on improving demand, plus our ability to reach revenue recognition milestones on projects already won. Catalysts for improving demand may include easing of tight credit conditions, new projects funded under the U.S. broadband stimulus program, and WiMAX license auctions in India. By the end of 2009, the result of streamlining and simplifying the organization will have taken full effect, bringing our revenue breakeven level to approximately $58 million. This will position us to benefit from further operating leverage as revenues improve.

“Longer term, we expect continued growth in demand for WiMAX based on low broadband penetration in many countries and continuing growth in demand for data-intensive applications on mobile platforms, aided by additional spectrum availability and the proliferation of new devices.”

Alvarion Ltd. (Nasdaq: ALVR)