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Alvarion(R) Reports Fourth Quarter and Full Year 2012 Results



Alvarion(R) Reports Fourth Quarter and Full Year 2012 Results

Financial Results Reflect Continuing Business of Vertical and Carrier
Unlicensed Solutions

TEL AVIV, Israel, March 4, 2013 (GLOBE NEWSWIRE) -- 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 fourth quarter
and year ended December 31, 2012. All results in this release reflect
continuing operations unless otherwise noted.

Fourth Quarter Highlights

  * Revenues of $8.2 million, a 25.4% sequential decrease
  * GAAP net loss from continuing operations of ($0.08) per share; non-GAAP
    net loss of ($0.07) per share

2012 Highlights

  * Revenues of $50.0 million, a 30.9% decrease compared to 2011
  * GAAP net loss from continuing operations of ($0.37) per share; non-GAAP
    net loss of ($0.23) per share
  * Debt reduced from $30 million to $11 million over the 12 month period
    ending December 31, 2012

Management Comments

"The announcement regarding the definitive agreement to sell our carrier
licensed business marks a new strategic direction at Alvarion, one that we
believe will deliver shareholder value in the long run. Once the sale is
complete, Alvarion will transform into a 'pure play' in the wireless broadband
market in the unlicensed frequencies, where we target two market segments:
private and public networks in vertical markets and the carrier Wi-Fi market,"
said Hezi Lapid, President and Chief Executive Officer of Alvarion. "We
believe that these two markets hold significant growth potential for us and
that we have the right product offering to successfully compete."

Lapid added, "2012 was a challenging year for Alvarion. Nonetheless, the
agreement to sell our carrier licensed business marks a significant step
forward in executing our new strategic plan for the company. Together with
other actions taken over the past several months, we believe that we have made
significant progress and expect to complete our turnaround successfully."

Fourth Quarter 2012 Results

Fourth quarter and full year 2012 results and all comparative periods reflect
results of operation of the Company's continuing vertical and carrier
unlicensed solutions business and classify the licensed carrier business as
discontinued operations.

In the fourth quarter of 2012, revenues were $8.2 million, a decrease of 25.4%
from $10.9 million in the third quarter of 2012, and a decrease of 59.1% from
$19.9 million in the fourth quarter of 2011.

GAAP net loss in the fourth quarter of 2012 was ($5.2) million, or ($0.08) per
share. This compares to GAAP net loss of ($8.8) million, or ($0.14) per share,
in the third quarter of 2012. GAAP results in the third quarter included
inventory write-off of approximately $4.2 million, amortization of intangible
assets, acquisition related expenses and stock-based compensation. GAAP net
loss in the fourth quarter of 2011 was ($6.3) million, or ($0.10) per share,
and included acquisition related expenses, other charges, amortization of
intangible assets and stock-based compensation.

On a non-GAAP basis, excluding loss from discontinued operations, stock-based
compensation and other charges, the Company reported a net loss of ($4.3)
million, or ($0.07) per share, compared with a non-GAAP net loss of ($3.7)
million, or ($0.06) per share, in the third quarter of 2012, and non-GAAP net
income of $0.8 million, or $0.01 per share, in the fourth quarter of 2011.  

In addition, the Company reported a net loss per share from discontinued
operations of ($0.19) for the fourth and third quarters of 2012, compared to a
net loss per share of ($0.10) for the fourth quarter of 2011.

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

Cash used in continuing operations in the fourth quarter of 2012 was $5.3
million. As of December 31, 2012, cash, cash equivalents and investments,
including restricted cash, totaled $14.4 million, after a $1.0 million
principal loan repayment. Total debt as of December 31, 2012, was $11 million.

Conference Call

Alvarion management will host a conference call today, March 4, 2013, at 9:00
a.m. EST to discuss fourth quarter and full year 2012 results and other
matters.

Please call the following dial in number to participate:

USA: +1 800-230-1059; International: +1 612-234-9959

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 March 4, 2013
through 11:59 a.m. EST on March 11, 2013.

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: 284083

 
 
ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
                                                                    
                                               Three     Three     Three
                       Year        Year Ended   Months    Months    Months
                      Ended                    Ended     Ended     Ended 
                      December    December 31, Dec 31,   December  Sept 30,
                      31,                                31,
                      2012        2011         2012      2011      2012
                                                                    
Sales                  $ 49,949    $ 72,273     $ 8,150   $ 19,918  $ 10,930
                                                                    
Cost of sales          29,494      38,926       5,036     10,360    5,860
Inventory write-off    4,217      —            —         —          4,217
                                                                    
Gross profit           16,238      33,347       3,114     9,558     853
                                                                    
Operating expenses:                                                 
Research and           12,664      10,708       2,001     3,699     3,432
development, net 
Selling and marketing  13,177      18,304       2,126     4,907     2,827
General and            7,104       5,170        2,993     1,427     1,383
administrative
Amortization of        2,235       186          559       186       558
intangible assets
Other charges (*)     —            11,020      —          2,456    —
Acquisition related    1,102       2,622        241       2,622     287
expenses (**)
                                                                    
Total Operating        36,282      48,010       7,920     15,297    8,487
expenses
                                                                    
Operating loss         (20,044)    (14,663)     (4,806)   (5,739)   (7,634)
                                                                    
Financial expenses,    (2,973)     (1,015)      (349)     (546)     (1,178)
net
                                                                    
Net loss from          (23,017)    (15,678)     (5,155)   (6,285)   (8,812)
continuing operations
                                                                    
Loss from
discontinued           (32,121)    (18,144)     (11,798)  (5,943)   (11,774)
operations, net
                                                                    
Net loss               $ (55,138)  $ (33,822)   $         $         $ (20,586)
                                               (16,953)  (12,228)
                                                                    
Basic net loss per                                                  
share:
Continuing operations  $ (0.37)    $ (0.25)     $ (0.08)  $ (0.10)  $ (0.14)
Discontinuing         (0.51)      (0.29)       (0.19)    (0.10)    (0.19)
operations
                      (0.88)      (0.54)       (0.27)    (0.20)    (0.33)
Weighted average
number of shares used 62,601      62,302       63,050    62,335    62,520
in computing basic
net loss per share 
                                                                    
Diluted net loss per                                                
share:
Continuing operations  $ (0.37)    $ (0.25)     $ (0.08)  $ (0.10)  $ (0.14)
Discontinuing         (0.51)      (0.29)       (0.19)    (0.10)    (0.19)
operations
                      (0.88)      (0.54)       (0.27)    (0.20)    (0.33)
                                                                    
Weighted average
number of shares used 62,601      62,302       63,050    62,335    62,520
in computing diluted
net loss per share 
                                                                    
(*) Results of the 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 Ended 
                              December 31,                      September 30,
                              2012                              2012
                              GAAP     Adjustments     Non-GAAP Non-GAAP
                                                                 
Sales                         $ 8,150  $ —             $ 8,150  $ 10,930
                                                                 
Cost of sales                 5,036    —               5,036    5,844
                                                                 
Gross profit                  3,114    —               3,114    5,086
                                                                 
Operating expenses:                                              
Research and development, net 2,001    —               2,001    3,405
Selling and marketing         2,126    —               2,126    2,798
General and administrative    2,993    (6)         (a) 2,987    1,355
Amortization of intangible    559      (559)       (b)  —       —
assets
Acquisition related expenses  241      (241)       (c) —        —
                                                                 
                                                                 
Total Operating expenses      7,920    (806)           7,114    7,558
                                                                 
Operating loss                (4,806)  806             (4,000)  (2,472)
                                                                 
Financial expenses , net      (349)    —               (349)    (1,178)
                                                                 
Net loss from continuing      (5,155)  806             (4,349)  (3,650)
operations
                                                                 
Loss form discontinued        (11,798) 11,798          —        —
operations, net
                                                                 
Net loss                      (16,953) 12,604          (4,349)  (3,650)
                                                                 
Basic net loss per share:                                        
Continuing operations         (0.08)                   (0.07)   (0.06)
Discontinuing operations      (0.19)                   0.00     0.00
                              $ (0.27)                 $ (0.07) $ (0.06)
                                                                 
Weighted average number of
shares used in computing      63,050                   63,050   62,520
basic net loss per share 
                                                                 
Diluted net loss per share:                                      
Continuing operations         (0.08)                   (0.07)   (0.06)
Discontinuing operations      (0.19)                   0.00     0.00
                              $ (0.27)                 $ (0.07) $ (0.06)
                                                                 
Weighted average number of
shares used in computing      63,050                   63,050   62,520
diluted net loss per share 
                                                                 
                                                                 
(a) The effect of stock-based compensation.                      
(b) The effect of amortization of purchased                      
intangibles. 
(c) 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, RESTRUCTURING EXPENSES AND OTHER CHARGES
                                                                      
U.S. dollars in thousands (except per share data)
                                                                      
                                                 Three     Three     Three
                            Year       Year       Months    Months    Months
                           Ended      Ended      Ended     Ended     Ended 
                           December   December   December  December  September
                           31,        31,        31,       31,       30,
                           2012       2011       2012      2011      2012
                                                                      
Net loss from continuing   $ (23,017) $ (15,678) $ (5,155) $ (6,285) $ (8,812)
operations
                                                                      
Amortization of intangible 2,235      1,764      559       1,764     558
assets
                                                                      
Stock based compensation
expenses related to ASC    938        1,671      6         263       100
718
                                                                      
Other charges (*)          —          11,020     —         2,456     —
                                                                      
Acquisition related        1,102      2,622      241       2,622     287
expenses (**) 
                                                                      
Inventory write-off        4,217      —          —         —         4,217
                                                                      
Net Income
(loss) excluding
amortization of acquired
intangibles, stock based   $ (14,525) $ 1,399    $ (4,349) $ 820     $ (3,650)
compensation and other
expenses from continuing
operations
                                                                      
Basic net earnings
(loss) per share excluding
amortization of acquired   $ (0.23)   $ 0.02     $ (0.07)  $ 0.01    $ (0.06)
intangibles, stock based
compensation and
restructuring expenses 
                                                                      
Weighted average number of
shares used in computing   62,601     62,302     63,050    62,335    62,520
basic net earnings (loss)
per share 
                                                                      
Diluted net earnings
(loss) per share excluding
amortization of acquired   $ (0.23)   $ 0.02     $ (0.07)  $ 0.01    $ (0.06)
intangibles, stock based
compensation and other
expenses
                                                                      
Weighted average number of
shares used in computing   62,601     63,891     63,050    62,921    62,520
diluted net earnings
(loss) per share 
                                                                      
(*) Results of the organizational change and                          
other.
(**) Charges related to the acquisition of                            
Wavion in November 2011.

 
 
ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS 
U.S. dollars in thousands 
                                                                  
                                                    December 31, September 30,
                                                    2012         2012
 ASSETS                                                           
Cash, cash equivalents, short-term and long-term     $ 10,736    $ 13,748
investments
Restricted Cash                                      3,679        1,500
Trade receivables                                    10,256       13,325
Other accounts receivable                            6,299        11,862
Inventories                                          9,282        8,600
Current assets of discontinued operations            21,798       48,494
                                                                  
LONG TERM Trade receivables                         —            —
                                                                  
PROPERTY AND EQUIPMENT, NET                          3,438        3,677
                                                                  
GOODWILL AND INTANGIBLE ASSETS, NET                  31,098       31,657
                                                                  
TOTAL ASSETS                                        $ 96,586      $ 132,863
                                                                  
                                                                  
                                                                  
 LIABILITIES AND SHAREHOLDERS' EQUITY                             
                                                                  
CURRENT LIABILITIES                                               
                                                                  
Current maturities of long term loan                $ 10,999     $ 12,032
Trade payables                                       8,449        11,824
Other accounts payable and accrued expenses          17,730       26,570
Liabilities - discontinued operations                15,698       24,853
                                                                  
Total current liabilities                            52,876       75,279
                                                                  
                                                                  
Long term accrued expenses                           7            17
Long term employees liabilities                      252          260
Long term liabilities others                         7,149        6,232
                                                                  
Total long term liabilities                          7,408        6,509
                                                                  
TOTAL LIABILITIES                                    60,284       81,788
                                                                  
SHAREHOLDERS' EQUITY                                 36,302       51,075
                                                                  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $ 96,586    $ 132,863

 
 
ALVARION LTD. & ITS SUBSIDIARIES
Consolidated Statement of Cash Flows 
U.S. dollars in thousands
                                                             Three 
                                                              Months ended
                                                             December 31, 2012
                                                              
Cash flows from operating activities:                         
Net loss                                                     $ (16,953)
Net loss from discontinued operations                        (11,798)
Net loss from continuing operations                          (5,155)
Adjustments to reconcile net loss to net cash provided by     
operating activities:
Depreciation                                                 495
Amortization of intangibles assets                           559
Stock based compensation expenses ASC 718                    6
Decrease in trade receivables                                3,069
Decrease in other accounts receivable and prepaid expenses   6,433
Increase in inventories                                      (682)
Decrease in trade payables                                   (3,375)
Increase in other accounts payables and accrued expenses     (7,544)
Decrease in long term accrued expenses                       (10)
Decrease in long term employees liabilities                  (8)
Increase in long term liabilities                            917
Net cash used in continuing operating activities             (5,295)
Net cash provided by discontinuing operating activities      5,749
Net cash provided by operating activities                    454
                                                              
                                                              
Cash flows from investing activities:                         
Purchase of fixed assets                                     (256)
Investment in restricted cash                                (2,179)
Net cash used in continuing investing activities             (2,435)
Net cash used in discontinuing investing activities          0
                                                             (2,435)
                                                              
                                                              
Cash flows from financing activities:                         
Proceeds from exercise of employees' stock options           2
Repayment of long term loan                                  (1,033)
Net cash used in financing activities                        (1,031)
                                                              
Decrease in cash, cash equivalents, short-term and long-term (3,012)
investments
                                                              
Cash, cash equivalents, short-term and long-term investments 13,748
at the beginning of the period
Cash, cash equivalents, short-term and long-term investments $ 10,736
at the end of the period
                                                              

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.

CONTACT: Investor Contacts:

         Avi Stern, CFO
         +972.3.767.4333
         avi.stern@alvarion.com 

         Elana Holzman, VP IR
         +972.3.645.7892
         elana.holzman@alvarion.com

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