Reports First Quarter 2005 Results
Alvarion Ltd. (NASDAQ: ALVR), the leading provider of wireless
broadband solutions worldwide, today announced financial results for
the first quarter ended March 31, 2005.
On a GAAP basis, revenue for the first quarter reached a record of
$57.2 million, up 2% sequentially from $55.9 million and up 28% from
$44.7 million in the first quarter of 2004. Net income was $0.4
million, or $0.01 per share for the quarter, compared with a net loss
of $6.8 million or $0.12 cents loss per share in the fourth quarter of
2004 and net income of $1.4 million, or $0.02 per share in the first
quarter of 2004. First quarter results included $0.9 million
acquisition-related expenses pertaining to the purchase of interWAVE
Communications on December 9, 2004, as well as $1.1 million of
amortization of intangibles and $0.5 million amortization of deferred
stock compensation. Management indicated that any additional
acquisition-related charge in Q2 will be minimal.
Excluding amortizations and acquisition-related charges, on a non-GAAP
basis, net income was $2.8 million, or $0.04 per share compared with
$5.4 million, or $0.08 per share in the prior quarter and $2.1
million, or $0.03 per share in Q1 of 2004.
Gross margin increased to 46% as a result of favorable product mix.
Excluding amortizations and acquisition-related expenses mentioned
above, operating expenses increased to $24.2 million or 42% of
revenue, on a non- GAAP basis, due primarily to the inclusion of
interWAVE Communications' operating expenses for a full quarter.
Comments of Management
"Our team executed very well this quarter on all major objectives -
financial, technical, and market development," said Zvi Slonimsky, CEO
of Alvarion. "We are meeting our targets and continue to expect
revenue growth of at least 25% this year.
"Demand is strong for both WiMAX and non-WiMAX solutions, and growth
in Q1 was broad-based, coming from products for both licensed and
license-exempt frequencies. Europe was a particular source of strength
again this quarter as a result of increasing demand from independent
operators using the 5.4 GHz licensed-exempt band that recently became
available throughout Europe. These operators are moving aggressively
to fill the holes in DSL coverage and, in turn, are prompting the Tier
1 operators to begin moving as well.
"The integration of interWAVE's business is progressing according to
plan, and we are beginning to expand our pipeline of new
opportunities. Based on this we continue to believe that, once we move
through the normal sales cycles for this business, we will begin to
see more traction during the second half of the year.
"We recently celebrated another important milestone in the widespread
adoption of the WiMAX standard when Intel officially launched their
Intel PRO/Wireless 5116 chip. Alvarion is the first company to offer a
live demonstration of a working CPE, based on the Intel chip,
connected to a live operator's network. This important event took
place during the last WiMAX summit in Malaga and is an indication of
our time-to-market advantage.
"It was certainly gratifying that most of the operators that
participated in the Intel launch event, including Altitude, Iberbanda,
and Millicom, are Alvarion customers. Evaluation and trial deployment
activity remains brisk, with Alvarion involved in most of the active
trials around the world. The scope and duration of these trials up to
this point reinforces our belief that our growth will accelerate in
the second half of the year.
"We believe that we stand on the threshold of the WiMAX revolution in
fixed broadband access, and we look forward to continuing to lead the
market for mobile WiMAX through our collaboration with several major
partners. We see a bright future for both fixed and mobile
applications of this technology," concluded Mr. Slonimsky.
The Company's revenue guidance for Q2 2005 is $53 million to $58
million. This guidance assumes no substantial contribution from
additional orders related to a major customer's ongoing project due to
the difficulty in predicting the precise timing of orders.
At the revenue range above, net earnings per share are expected to
range between breakeven and 3 cents while non-GAAP net earnings per
share, which excludes amortization of intangibles and
acquisition-related charges, is expected to range between 2 and 5
Alvarion's management will host a conference call today, May 4, 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: 612-332-1025;
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 2:30 p.m. EDT on May 4
through 11:59 p.m. EDT on May 11, 2005. To access the replay, please
call USA: 320-365-3844, International: +1-320-365-3844. To access the
replay, users will need to enter the following code: 777770.