Alvarion® Reports Third Quarter 2012 Results

  Alvarion® Reports Third Quarter 2012 Results

Business Wire

TEL AVIV, Israel -- November 14, 2012

Alvarion® Ltd.  (NASDAQ:ALVR) a global provider of optimized wireless
broadband solutions addressing the connectivity, coverage and capacity
challenges of public and private networks, today announced its financial
results for the third quarter of 2012.

Third Quarter Highlights

  *Revenues of $27.1 million, a 19.9% sequential decrease
  *GAAP net loss of ($0.33) per share; non-GAAP net loss of ($0.12) per share
  *Other income of $9.4 million recorded in connection with the sale an IP
    portfolio and a claim right

Management Comments

“During the third quarter we continued with the execution of the turnaround
plan we initiated in mid-2012. We made important progress in recent weeks with
the sale of certain assets which brought over $20 million into the company
without diluting our shareholders,” said Hezi Lapid, President and Chief
Executive Officer of Alvarion. “At the same time, we are continuing our in
depth review of our product roadmap and strategy which will help us focus on
the right growth markets for Alvarion. Overall, I believe that we are making
progress in order to reach sustainable growth and profitability”.

Third Quarter 2012 Results

In the third quarter of 2012, revenues were $27.1 million, a decrease of 19.9%
from $33.8million in the second quarter of 2012, and a decrease of 42.4% from
$47.0 million in the third quarter of 2011.

GAAP net loss in the third quarter of 2012 was ($20.6) million, or ($0.33) per
share, including inventory write-off of approximately $20.8 million, offset by
income from the sale of a patent portfolio and a claim right for approximately
$9.4 million. This compares to a net loss of ($10.7) million, or ($0.17) per
share in the second quarter of 2012, including restructuring and other charges
of approximately $3.2 million. GAAP net loss in the third quarter of 2011 was
($7.5) million, or ($0.12) per share, including other loss of approximately
$7.1 million.

On a non-GAAP basis, excluding stock-based compensation, inventory write-off,
income from the sale of a patent portfolio and a claims right and other
charges, the Company reported a net loss of ($7.7) million, or ($0.12) per
share, compared with a non-GAAP net loss of ($5.8) million, or ($0.09) per
share, in the second quarter of 2012, and a non-GAAP net income of $0.3
million, or $0.01 per share, in the third quarter of 2011.

Please refer to the accompanying financial table for reconciliation of GAAP
financial information to non-GAAP for the third quarter of 2012 and the
comparative periods.

Cash used in operations in the third quarter of 2012 was $6.4 million. As of
September30, 2012, cash, cash equivalents and investments, including
restricted cash, totaled $15.2 million, after a $10million principal loan
repayment. Total debt as of September 30, 2012, was $12million.

Conference Call

Alvarion management will host a conference call today, November 14, 2012, at
9:00 a.m. EST to discuss third quarter 2012 results and other matters.

Please call the following dial in number to participate:

USA: +1 800-230-1074; International: +1 612-288-0329

The public is invited to listen to the live webcast of the conference call.
For details please visit Alvarion’s Investor Relations website at
www.alvarion.com/investors/webcasts.

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. EST on November 14,
2012 through 11:59 a.m. EST on November 21, 2012.

To access the replay, please call:

USA: +1 800-475-6701; International: +1 320-365-3844

To access the replay, users will need to enter the following code: 269194

About Alvarion

Alvarion Ltd. (NASDAQ:ALVR) provides optimized wireless broadband solutions
addressing the connectivity, coverage and capacity challenges of telecom
operators, smart cities, security, and enterprise customers. Our innovative
solutions are based on multiple technologies across licensed and unlicensed
spectrums. (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 various 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: our failure to fully implement our 2012 turnaround
plan, our inability to reallocate our resources and rationalize our business
in a more efficient manner, potential impact on our business of the current
global macro-economic uncertainties, 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 4G license allocation in certain countries; the
failure of the products for the 4G market to develop as anticipated; our
inability to capture market share in the expected growth of the 4G market as
anticipated, due to, among other things, competitive reasons or failure to
execute in our sales, marketing or manufacturing objectives; the failure of
our strategic initiatives to enable us to more effectively capitalize on
market opportunities as anticipated; delays in the receipt of orders from
customers and in the delivery by us of such orders; our failure to fully and
effectively integrate the business and technology of Wavion Inc., acquired by
us in November 2011, into our products and realize the expected synergies from
the acquisition; the failure of the markets for our (including Wavion's)
products to grow as anticipated; our 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; our inability to establish and maintain relationships with commerce,
advertising, marketing, and technology providers; our inability to comply with
covenants included in our financing agreements; our inability to raise
sufficient funds to continue our operations, either through equity issuances
or asset sales; and other risks detailed from time to time in the Company’s
annual reports on Form 20-F as well as in other filings with the U.S.
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 U.S. Securities and Exchange Commission,
which this press release will be a part of.

To receive Alvarion's press releases please contact Sivan Farfuri,
sivan.farfuri@alvarion.com or +972.3.767.4333. Please see the Investor section
of the Alvarion website for more information:
http://www.alvarion.com/investors.

Alvarion®, its logo and certain names, product and service names referenced
herein are either registered trademarks, trademarks, trade names or service
marks of Alvarion Ltd. in certain jurisdictions. All other names are or may be
the trademarks of their respective owners.




ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
                                                                  
                 Nine          Nine          Three         Three        Three
                 Months        Months        Months        Months       Months
                 Ended         Ended         Ended         Ended        Ended
                 Sept 30,      Sept 30,      Sept 30,      Sept 30,     June 30,
                  2012        2011        2012        2011       2012    
                                                                        
Sales            $ 94,185      $ 148,818     $ 27,065      $ 46,956     $ 33,810
                                                                        
Cost of sales      58,166        96,016        16,915        27,957       21,329
Inventory         20,836      -           20,836      -          -       
write-off
                                                                        
Gross profit       15,183        52,802        (10,686 )     18,999       12,481
                                                                        
Operating
expenses:
Research and
development,       20,256        20,611        5,854         6,393        7,527
net
Selling and        23,091        28,376        6,343         8,940        8,074
marketing
General and        10,714        10,668        4,692         3,431        2,762
administrative
Amortization
of intangible      1,676         -             558           -            559
assets
Other charges      3,519         7,128         358           -            3,161
(*)
Acquisition
related            861           -             287           -            285
expenses (**)
Other income
from sale of       (4,200  )     -             (4,200  )     -            -
patents
Sale of claim      (5,170  )     -             (5,170  )     -            -
right
                                                                        
                                                                    
Total
Operating          50,747        66,783        8,722         18,764       22,368
expenses
                                                                    
Operating          (35,564 )     (13,981 )     (19,408 )     235          (9,887  )
income (loss)
                                                                        
Other loss         -             (7,144  )     -             (7,144 )     -
                                                                        
Financial          (2,624  )     (469    )     (1,178  )     (552   )     (849    )
expenses, net
                                                                    
Net loss           (38,188 )     (21,594 )     (20,586 )     (7,461 )     (10,736 )
before Tax
                                                                        
Income Tax         -             -             -             -            -
                                                                    
Net loss          (38,188 )    (21,594 )    (20,586 )    (7,461 )    (10,736 )
                                                                        
Basic net loss
per share:
                  (0.61   )    (0.35   )    (0.33   )    (0.12  )    (0.17   )
Weighted
average number
of shares used    62,451      62,291      62,520      62,307     62,442  
in computing
basic net loss
per share
                                                                        
Diluted net
loss per
share:
                  (0.61   )    (0.35   )    (0.33   )    (0.12  )    (0.17   )
                                                                        
Weighted
average number
of shares used    62,451      62,291      62,520      62,307     62,442  
in computing
diluted net
loss per share
                                                                        
(*) Results of organizational change and other.
(**) Charges related to the acquisition of Wavion in November 2011.

                                                             
                                                                      
                                                                      
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 Ended                                         Months
                 Sept 30,                                             Ended
                 2012                                                 June 30,
                                                                      2012
                 GAAP          Adjustments               Non-GAAP     Non-GAAP
                                                                      
Sales            $ 27,065      $ -                       $ 27,065     $ 33,810
                                                                      
Cost of sales      16,915        (21     )   (a)           16,894       21,174
Inventory          20,836        (20,836 )                 -            -
write-off
                                                                   
Gross profit      (10,686 )    20,857                  10,171     12,636 
                                                                      
Operating
expenses:
Research and
development,       5,854         (69     )   (a)           5,785        7,269
net
Selling and        6,343         (65     )   (a)           6,278        7,806
marketing
General and        4,692         (34     )   (a)           4,658        2,500
administrative
Amortization
of intangible      558           (558    )   (b)           -            -
assets
Other charges      358           (358    )   (c)           -            -
Acquisition
related            287           (287    )   (d)           -            -
expenses
Other income
from sale of       (4,200  )     4,200                     -            -
patents
Sale of claim      (5,170  )     5,170                     -            -
right
                                                                      
                                                                   
Total
Operating          8,722         7,999                     16,721       17,575
expenses
                                                                   
Operating loss     (19,408 )     12,858                    (6,550 )     (4,939 )
                                                                      
Financial          (1,178  )     -                         (1,178 )     (849   )
expenses, net
                                                                   
Net loss           (20,586 )     12,858                    (7,728 )     (5,788 )
before Tax
                                                                      
Income Tax         -             -                         -            -
                                                                   
Net loss          (20,586 )    12,858                  (7,728 )    (5,788 )
                                                                      
Basic net loss   $ (0.33   )                             $ (0.12  )   $ (0.09  )
per share
                                                                      
Weighted
average number
of shares used    62,520                                62,520     62,442 
in computing
basic net loss
per share
                                                                      
Diluted net      $ (0.33   )                             $ (0.12  )   $ (0.09  )
loss per share
                                                                      
Weighted
average number
of shares used    62,520                                62,520     62,442 
in computing
diluted net
loss per share
                                                                      
(a) The effect of stock-based compensation.
                                                                      
(b) The effect of amortization of purchased intangibles.
                                                                      
(c) Results of organizational change and other.
                                                                      
(d) Charges related to the acquisition of Wavion in November 2011.

                                                                 
                                                                       
                                                                       
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, STOCK BASED COMPENSATION EXPENSES, RESTUCTURING
EXPENSES AND OTHER CHARGES
                                                                       
U.S. dollars in thousands (except per share data)
                                                                       
                Nine          Nine          Three         Three        Three
                Months        Months        Months        Months       Months
                Ended         Ended         Ended         Ended        Ended
                Sept 30,      Sept 30,      Sept 30,      Sept 30,     June 30,
                 2012        2011        2012        2011       2012    
                                                                       
Net income
(loss)          $ (38,188 )   $ (21,594 )   $ (20,586 )   $ (7,461 )   $ (10,736 )
according to
US GAAP
                                                                       
Amortization
of intangible     1,676         -             558           -            559
assets
                                                                       
Stock based
compensation
expenses          1,757         2,656         189           642          943
related to
ASC 718
                                                                       
Other charges     3,519         7,128         358           -            3,161
(*)
                                                                       
Acquisition
related           861                         287           -            285
expenses (**)
                                                                       
Inventory         20,836                      20,836        -            -
write-off
                                                                       
Sale of Claim     (5,170  )                   (5,170  )     -            -
Rights
                                                                       
Other
(income) loss    (4,200  )    7,144       (4,200  )    7,144      -       
(***)
Net Income
(loss)
excluding
amortization
of acquired     $ (18,909 )   $ (4,666  )   $ (7,728  )   $ 325       $ (5,788  )
intangibles,
stock based
compensation
and other
expenses
                                                                       
Basic net
earnings
(loss) per
share
excluding
amortization
of acquired     $ (0.30   )   $ (0.07   )   $ (0.12   )   $ 0.01      $ (0.09   )
intangibles,
stock based
compensation
and
restructuring
expenses
                                                                       
Weighted
average
number of
shares used
in computing     62,451      62,291      62,520      62,307     62,442  
basic net
earnings
(loss) per
share
                                                                       
Diluted net
earnings
(loss) per
share
excluding
amortization    $ (0.30   )   $ (0.07   )   $ (0.12   )   $ 0.01      $ (0.09   )
of acquired
intangibles,
stock based
compensation
and other
expenses
                                                                       
Weighted
average
number of
shares used
in computing     62,451      62,291      62,520      63,872     62,442  
diluted net
earnings
(loss) per
share
                                                                       
(*) Results of organizational change and other.
(**) Charges related to the acquisition of Wavion in November 2011.
(***) Results of one time charges related to customer and income from the sale of
patent.




ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
                                                             
                                                   Sept 30,        June 30,
                                                   2012            2012
ASSETS
Cash, cash equivalents, short-term and             $ 13,748       $ 31,968  
long-term investments
Restricted cash                                      1,500           -
Trade receivables                                    37,984          41,477
Other accounts receivable                            15,876          9,657
Inventories                                          18,621          37,579
                                                                   
LONG TERM Trade receivables                          5,561           5,470
                                                                   
PROPERTY AND EQUIPMENT, NET                          7,916           8,763
                                                                   
GOODWILL AND INTANGIBLE ASSETS, NET                 31,657        32,214  
                                                                   
TOTAL ASSETS                                       $ 132,863      $ 167,128 
                                                                   
                                                                   
                                                                   
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                   
CURRENT LIABILITIES
                                                                   
Current maturities of long term loan               $ 12,032        $ 7,545
Trade payables                                       18,782          29,685
Other accounts payable and accrued expenses         44,165        37,792  
                                                                   
Total current liabilities                            74,979          75,022
                                                                   
                                                                   
Long term accrued expenses                           17              74
Long term employees liabilities                      560             618
Long term others liabilities                         6,232           6,661
Long term loan                                      -             14,677  
                                                                   
Total long term liabilities                          6,809           22,030
                                                                   
TOTAL LIABILITIES                                    81,788          97,052
                                                                   
SHAREHOLDERS' EQUITY                                51,075        70,076  
                                                                   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $ 132,863      $ 167,128 




ALVARION LTD.& ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
U.S. dollars in thousands
                                                       
                                                            Three
                                                            Months ended
                                                            September 30, 2012
                                                            
Cash flows from operating activities:
Net loss                                                    $    (20,586   )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation                                                     979
Amortization of intangibles assets                               557
Stock based compensation expenses ASC 718                        191
Decrease in trade receivables                                    3,493
Increase in other accounts receivable and prepaid                (6,110    )
expenses
Decrease in inventories                                          18,958
Increase in long term trade receivable                           (91       )
Decrease in trade payables                                       (10,903   )
Increase in other accounts payables and accrued                  7,658
expenses
Decrease in long term accrued expenses                           (57       )
Decrease in long term employees liabilities                      (58       )
Decrease in long term liabilities                               (429      )
Net cash used in operating activities                           (6,398    )
                                                            
                                                            
Cash flows from investing activities:
Purchase of fixed assets                                         (132      )
Investment in restricted cash                                   (1,500    )
Net cash used in investing activities                           (1,632    )
                                                            
Cash flows from financing activities:
Proceeds from exercise of employees' stock options               -
Repayment of long term loan                                     (10,190   )
Net cash Used in financing activities                           (10,190   )
                                                            
Decrease in cash, cash equivalents, short-term and              (18,220   )
long-term investments
                                                            
Cash, cash equivalents, short-term and long-term                31,968    
investments at the beginning of the period
Cash, cash equivalents, short-term and long-term            $    13,748    
investments at the end of the period

Contact:

Alvarion Ltd.
Investors:
Lior Shemesh, CFO, +1 760-685-2007
lior.shemesh@alvarion.com
or
Elana Holzman, VP IR, +972.3.645.7892
elana.holzman@alvarion.com
 
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