TEL AVIV, Israel May 5, 2008 - Alvarion Ltd. (NASDAQ: ALVR), the worlds leading provider of WiMAX and wireless broadband solutions, today announced financial results for the first quarter ended March 31, 2008.
* Record revenues of $67.2 million, up 29% from Q1 2007
* Non-GAAP EPS of $0.03; GAAP loss per share of ($0.01)
* Cash reserves increased to $148 million
* Record WiMAX revenues of $40 million, up 58% from Q1 2007
* Cumulative WiMAX shipments of $300 million
In the first quarter of 2008, revenues increased to $67.2 million, a 29% increase from $52.1 million in the first quarter of 2007, and a 1% increase from $66.3 million in the fourth quarter of 2007. BreezeMAX® revenues in Q1 2008 were approximately $40 million, or about 60% of total revenues, compared to about $36 million or about 55% of total revenues, in Q4.
GAAP net loss in the first quarter of 2008 was ($601,000), or ($0.01) per share, compared to a GAAP net loss of ($623,000), or ($0.01) per share, in Q1 of 2007, and GAAP net income of $12.4 million, or $0.19 per share, in Q4 2007, which included non-recurring other income of $8.3 million, representing mainly the additional consideration received from the sale of Alvarions equity investment in LGC Wireless Inc. (LGC) and the promissory notes and $3.6 million of income from discontinued operations.
Excluding discontinued operations, amortization of acquired intangibles, stock based compensation expenses and other income, the company reported a non-GAAP net profit of $2.0 million, or $0.03 per diluted share, compared with a non-GAAP net profit of $1.3 million, or $0.02 per diluted share, in Q1 2007, and $3.1 million, or $0.05 per diluted share, in the fourth quarter of 2007. The sequential decline in net income was primarily the result of unfavorable currency exchange rates.
During Q1 2008, the company generated positive cash flow of approximately $9.2 million, of which about $8.8 million was received from ADC Telecommunications Inc. (ADC), representing the remainder of the payment of the LGC notes the company held as a result of selling the CMU unit to LGC. The payment followed the acquisition of LGC by ADC in Q4 of 2007. Cash reserves as of March 31, 2008 totaled approximately $148 million, up from about $139 million in the previous quarter.
For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results of continuing and discontinued operations, see the attached table showing the detailed reconciliation of GAAP to non-GAAP results for Q1 2008 and the comparative periods.
Comments from Management
We had a very good quarter demonstrating growth, said Tzvika Friedman, President and CEO of Alvarion. Our team executed extremely well, and we achieved another quarter of record revenues, despite macro-economic conditions and seasonality. At the end of Q1, we had 225 commercial WiMAX deployments, which represent an important base of satisfied customers many of them planning to expand their networks. In addition, we added several important new customers during the quarter, which demonstrates our ability to win, even as the competitive landscape changes. The higher level of business we are targeting will require a modest increase in certain operating expenses, and with the outlook for the dollar remaining weak, we will continue pursuing additional measures to further control costs in order to mitigate the impact.
There are several factors increasing our confidence in the future, concluded Mr. Friedman. Bookings in Q1 were strong and we see demand for WiMAX growing, our strategy is working, we have a better position in the market, and we have several important deal wins that will be reflected in our revenues in future quarters.
Q2 2008 Guidance
The companys revenue guidance for Q2 2008 is $67 to $71 million. Based on this revenue range, non-GAAP per share results for continuing operations are expected to range between $0.00 and $0.04 based on approximately 65.0 million of estimated weighted average number of diluted shares. GAAP per share results are expected to range between a loss of ($0.04) and $0.00.
Alvarions management will host a conference call today, May 5, 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: (800)-954-1051, International: +1-(415)-226-5355.
The public is invited to listen to the live webcast of the conference call. For details please visit Alvarions 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 11:00 a.m. ET on May 5, 2008 through 11:59 p.m. ET on June 2, 2008. To access the replay, please call USA: (800) 633-8284, International: +1(402)-977-9140. To access the replay, users will need to enter the following code: 21378855
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