Alvarion Reports Fourth Quarter and Full Year 2004 Results; Q4 Revenue Set New Record; Non GAAP EPS Excluding Acquisition Impact Exceeded Guidance.TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. -- Alvarion Alvarion ltd. (NASDAQ:ALVR) is a global broadband wireless systems manufacturer formed by the merger of two Israeli companies, BreezeCOM and Floware. Alvarion has its global HQ in Tel-Aviv, Israel and has offices in 23 countries. Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ALVR), the leading provider of wireless broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 solutions worldwide, today announced financial results for the fourth quarter and year ended December December: see month. 31, 2004. Both periods include the operating results of interWAVE Communications Ltd (interWAVE) from the date of acquisition, December 9, 2004. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, revenue for the fourth quarter was $55.9 million and the net loss was $(6.8) million, or $(0.12) per share. Fourth quarter results included $1.6 million in revenue and an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $(0.8) million from the inclusion of interWAVE for a 3-week period. GAAP results in the fourth quarter also included special charges of $11.4 million, comprised mainly of the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of interWAVE in-process research and development and other acquisition-related expenses. Strong Fourth Quarter Operating Performance For comparison purposes, Alvarion's non-GAAP standalone stand·a·lone adj. Self-contained and usually independently operating: a standalone computer terminal. revenue (excluding interWAVE operations) reached a record $54.3 million in the fourth quarter of 2004, an increase of 4% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , and up 38% over the comparable GAAP revenue in the fourth quarter of 2003. Non-GAAP standalone gross margin increased for the 13th consecutive quarter to 44.7%. Non-GAAP standalone EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. exceeded the high end of management's guidance by one cent per share. Excluding amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and deferred stock compensation, non-GAAP standalone EPS was $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with non-GAAP EPS of $0.07 per diluted share in the third quarter of 2004 and non-GAAP EPS of $0.01 per diluted share in the fourth quarter of 2003. Commenting on the results, Zvi Slonimsky Slonimsky is a Russian, Belarusian, Polish and Jewish surname meaning a person from Belarusian town of Slonim. Slonimsky may stand for the following people:
A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and, after acquisition-related payments, we ended the year with about $133 million in cash on our balance sheet." Summary of Full Year Results On a GAAP basis, revenue for 2004 was $201.5 million, with a net profit of $0.9 million, or $0.01 per diluted share. Full year results included $1.6 million in revenue and an operating loss of $(0.8) million from the inclusion of interWAVE for a 3-week period. GAAP results for 2004 also included special charges of $11.4 million, comprised mainly of the write-off of interWAVE in-process research and development and other acquisition-related expenses. For comparison purposes, Alvarion's non-GAAP standalone revenue for 2004 was $200 million, compared with GAAP revenue of $127.2 million in 2003. Excluding amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and deferred stock compensation, non-GAAP standalone net profit was $15.9 million, or $0.25 per diluted share, compared with a non-GAAP net loss of $(6.5) million or $(0.12) per share in 2003. Management Review and Comments "In addition to strong growth, we achieved a number of important business objectives and began multiple strategic initiatives to enhance our future prospects for growth and industry leadership," continued Mr. Slonimsky. "During the year, we dramatically increased our direct sales and proved that we can handle large projects for major operators, while also strengthening our relationships with OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and partners and distributors around the globe. Recently, we expanded our existing OEM relationships with Siemens (Siemens AG, Munich, Germany, www.siemens.com) A leading European electrical and electronics firm founded in 1847. Siemens has more than 430,000 employees in nearly 200 countries, and more than 50,000 professionals are engaged in research and development. and Alcatel Alcatel Société Alsacienne de Constructions Atomiques, de Télécomunications et d'Electronique to include our BreezeMAX product and signed a new WiMAX (World Interoperability for Microwave Access, Inc., www.wimaxforum.org) An organization founded in 2001 that promotes the IEEE 802.16 wireless broadband standard and provides certification for devices for compliant devices. OEM agreement with Lucent as well. "In June June: see month. , we introduced BreezeMAX 3500, which made us the first vendor to market a WiMAX-ready product. We are gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by the strong interest in WiMAX from every type of customer, both incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. and alternative carriers as well as both fixed and mobile operators. We have about 50 installations of our WiMAX-ready solution - either as commercial deployments or in various stages of trial activity. Operators that already have commercial deployments of our WiMAX-ready solutions include, among others, Iberbanda in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , Altitude altitude, vertical distance of an object above some datum plane, such as mean sea level or a reference point on the earth's surface. It is usually measured by the reduction in atmospheric pressure with height, as shown on a barometer or altimeter. in France and MobileCity in Scandinavia Scandinavia (skăn'dĭnā`vēə), region of N Europe. It consists of the kingdoms of Sweden, Norway, and Denmark; Finland and Iceland are usually considered part of Scandinavia. . This points to Alvarion as the vendor of choice for future WiMAX solutions, and we believe that this high level of interest will be converted into revenue mostly beginning in the second half of 2005. "We are executing well on our product plans and continue to expect to be introducing an Intel-based WiMAX CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment by mid-year. We plan to expand into the mobile broadband Description Mobile Broadband is a type of wireless internet access that differs from Wi-Fi. Mobile Broadband is the name used to describe the 3G services which are made possible by HSDPA and HSUPA, the latest technologies on the W-CDMA evolutionary path. arena next year via two strategic moves. First was the acquisition of the interWAVE cellular mobile business in December. We've we've Contraction of we have. we've have added products that support compact GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. and CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. cellular network deployments and network extensions in hard to reach areas such as rural portion of developing regions, as well as compact cellular networks for specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. applications such as homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States , disaster relief and travel and leisure. The new CDMA technology complements our existing voice and data capabilities in developing regions. We are pleased that the integration process is moving smoothly and according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. our plans. "The second strategic move was the formation of a new business unit to focus on developing a mobile WiMAX See WiMAX and 802.16. solution to be launched next year. The new mobile WiMAX business unit will draw on the technology and experience from both the fixed BWA (Broadband Wireless Access) High-speed wireless access. Typically refers to wireless last mile access to the Internet. See WiMAX and broadband. and cellular businesses to accelerate development. "Owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de our strong financial condition and experienced and dedicated team, we were able to deliver outstanding performance while making a number of strategic investments to enhance our position in the future. This is an accomplishment the entire Alvarion Team should take pride in," added Mr. Slonimsky. Q1 2005 Guidance The Company expects Q1 2005 revenue to range between $57 and $60 million. At this revenue range, net earnings per share are expected to range between breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations and $0.01, while non-GAAP net earnings per share, which excludes special charges, amortization of intangible assets and deferred stock-based compensation, are expected to range between $0.03 and $0.04. Alvarion's management will host a conference call today, February February: see month. 16, at 9:00 a.m. Eastern Time to discuss the quarter and full year results. To participate in the call, please dial one of the following numbers approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. five minutes prior to the scheduled start time: USA: 651-291-5254; International: +1-651-291-5254. 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 (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. of the on-line broadcast will be available on the website. A replay of the call will be available from 2:15 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on February 16 through 11:59 p.m. EDT on February 23. 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: 764459. About Alvarion With more than 2 million units deployed in 130 countries, Alvarion is the worldwide leader in wireless broadband providing systems to carriers, ISPs and private network operators, and also in extending coverage of GSM and CDMA mobile networks to developing countries and other hard to serve areas. Leading the WiMAX revolution, Alvarion has the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. Alvarion's products enable the delivery of business and residential broadband access See broadband and wireless broadband. , corporate VPNs, toll quality telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. , mobile base station feeding, hotspot (1) The geographic boundary covered by a Wi-Fi (802.11) wireless access point. Typically set up for Internet access, anyone entering the hotspot with a Wi-Fi-based laptop can connect to the Internet, providing the access point is configured to advertise its presence and coverage extension, community interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. , public safety communications, and mobile voice and data. Alvarion works with several global OEM providers and more than 200 local partners to support its diverse global customer base in solving their last-mile challenges. As a wireless broadband pioneer, Alvarion has been driving and delivering innovations for more than ten years from core technology developments to creating and promoting industry standards. Leveraging its key roles in the IEEE (Institute of Electrical and Electronics Engineers, New York, www.ieee.org) A membership organization that includes engineers, scientists and students in electronics and allied fields. and HiperMAN standards committees and experience in deploying OFDM-based systems, the Company's prominent work in the WiMAX Forum is focused on increasing widespread adoption of standards-based products in the wireless broadband market and leading the entire industry to mobile WiMAX solutions. For more information, visit Alvarion's World Wide Web site at www.alvarion.com This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on the current expectations or beliefs of Alvarion's management and are subject to a number of 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: failure of the WiMAX market to develop as anticipated; failure by us to deliver WiMAX products as anticipated; 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; as well as the in ability to establish and maintain relationships with commerce, advertising, marketing, and technology providers and other risks detailed from time to time in filings with the Securities and Exchange Commission. In addition, our limited history in completing acquisitions may adversely impact our ability to successfully integrate the business of Alvarion and interWAVE; we may face liabilities and expenses in excess of those currently anticipated with respect to the acquisition of interWAVE; and we may be unable to retain key personnel of interWAVE. Certain information set forth in this press release pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to third parties has not been independently verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. 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 Securities and Exchange Commission, which this press release will be a part of. You may request Alvarion's future press releases or a complete Investor Kit by contacting Carmen Carmen throws over lover for another. [Fr. Lit.: Carmen; Fr. Opera: Bizet, Carmen, Westerman, 189–190] See : Faithlessness Carmen the cards repeatedly spell her death. [Fr. Deville Deville may refer to:
The process by which the corporation communicates with its investors. : carmen.deville@alvarion.com or +1 760-517-3188.
ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2004 2003
------------ ------------
ASSETS
Cash, cash equivalents, short-term and
long-term investments $ 132,682 $ 153,616
Trade receivables 27,314 21,199
Other accounts receivable 6,492 4,499
Inventories 40,398 36,981
Severance pay fund 7,025 5,493
Long-term receivables 456 834
PROPERTY AND EQUIPMENT, NET 11,925 11,939
GOODWILL AND OTHER INTANGIBLE ASSETS 102,269 50,396
------------ ------------
TOTAL ASSETS $ 328,561 $ 284,957
----- ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 26,481 $ 23,780
Other accounts payable and accrued
expenses 55,637 27,959
------------ ------------
Total current liabilities 82,118 51,739
-----
LONG TERM LIABILITIES 3,505 5,248
ACCRUED SEVERANCE PAY 10,126 7,768
------------ ------------
TOTAL LIABILITIES 95,749 64,755
-----
SHAREHOLDERS' EQUITY 232,812 220,202
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 328,561 $ 284,957
----- ============ ============
ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Three Three Three
Year Year Months Months Months
Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 30,
--------- --------- --------- --------- ---------
2004 2003 2004 2003 2004
--------- --------- --------- --------- ---------
Sales $ 201,507 $ 127,208 $ 55,878 $ 39,496 $ 52,178
Cost of sales 113,741 75,097 31,328 22,750 29,049
--------- --------- --------- --------- ---------
Gross profit 87,766 52,111 24,550 16,746 23,129
--------- --------- --------- --------- ---------
Operating
expenses:
Research and
development,
net 27,816 23,505 7,598 6,089 6,744
Selling and
marketing 39,038 32,904 10,002 8,912 10,543
General and
administrative 9,682 6,323 2,663 1,740 2,412
Amortization of
acquired current
technology,
customer
relationships
and trademarks 2,779 2,606 772 706 669
Amortization of
deferred stock
compensation 60 511 27 91 11
In Process
Research &
Development
write-off 10,993 - 10,993 - -
Acquisition
related
expenses 369 2,201 369 - -
--------- --------- --------- --------- ---------
Total
Operating
expenses 90,737 68,050 32,424 17,538 20,379
--------- --------- --------- --------- ---------
Operating
income (loss) (2,971) (15,939) (7,874) (792) 2,750
Financial
income, net 3,821 4,127 1,119 873 920
--------- --------- --------- --------- ---------
Net Income
(loss ) $ 851 $ (11,812) $ (6,755) $ 81 $ 3,670
--------- --------- --------- --------- ---------
Basic earnings
(loss) per
share $ 0.02 $ (0.23) $ (0.12) $ 0.00 $ 0.06
========= ========= ========= ========= =========
Weighted average
number of shares
used in
computing basic
earnings (loss)
per share 56,549 52,127 57,619 53,219 56,885
========= ========= ========= ========= =========
Diluted
earnings
(loss) per
share $ 0.01 $ (0.23) $ (0.12) $ 0.00 $ 0.06
========= ========= ========= ========= =========
Weighted average
number of shares
used in
computing
diluted earnings
(loss) per share 63,754 52,127 57,619 62,252 63,837
========= ========= ========= ========= =========
ALVARION LTD.& ITS SUBSIDIARIES
DISCLOSURE OF NON-US GAAP NET INCOME (LOSS)
FOR COMPARATIVE PURPOSES NET INCOME (LOSS) AND EARNINGS (LOSS)
PER SHARE EXCLUDING AMORTIZATION OF ACQUIRED INTANGIBLES,
DEFERRED STOCK COMPENSATION, ACQUIRED IN-PROCESS RESEARCH AND
DEVELOPMENT WRITE-OFF AND OTHER ACQUISITION RELATED EXPENSES
U.S. dollars in thousands (except per share data)
Three Three Three
Year Year Months Months Months
Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sept. 30,
--------- --------- --------- --------- ---------
2004 2003 2004 2003 2004
--------- --------- --------- --------- ---------
Net Income
(loss)
according to
US GAAP $ 851 $ (11,812) $ (6,755) $ 81 $ 3,670
Amortization of
acquired
current
technology,
customer
relationships
and trademarks 2,779 2,606 772 706 669
Amortization of
deferred stock
compensation 60 511 27 91 11
Acquired In-
Process
Research &
Development
write-off 10,993 - 10,993 - -
Acquisition
related
expenses 369 2,201 369 - -
--------- --------- --------- --------- ---------
Net Income
(loss),
excluding
amortization
of intangibles
and deferred
stock
compensation,
acquisition
related
expenses and
In-process
Research and
Development
write-off $ 15,052 $ (6,494) $ 5,407 $ 878 $ 4,350
========= ========= ========= ========= =========
Basic net
earnings
(loss) per
share,
excluding
amortization
of intangibles
and deferred
stock
compensation,
acquisition
related
expenses and
In-process
Research and
Development
write-off $ 0.27 $ (0.12) $ 0.09 $ 0.02 $ 0.08
========= ========= ========= ========= =========
Weighted
average number
of shares used
in computing
basic net
earnings
(loss) per
share 56,549 52,127 57,619 53,219 56,885
========= ========= ========= ========= =========
Diluted net
earnings
(loss) per
share,
excluding
amortization
of intangibles
and deferred
stock
compensation ,
acquisition
related
expenses and
In-process
Research and
Development
write-off $ 0.24 $ (0.12) $ 0.08 $ 0.01 $ 0.07
========= ========= ========= ========= =========
Weighted
average number
of shares used
in computing
diluted net
earnings
(loss) per
share 63,754 52,127 64,447 62,252 63,837
========= ========= ========= ========= =========
ALVARION LTD.& ITS SUBSIDIARIES
FOR COMPARATIVE PURPOSES ADDITIONAL INFORMATION ABOUT THE RESULTS OF
OPERATIONS FOR THE PERIOD ENDED DECEMBER 31, 2004
U.S. dollars in thousands (except per share data)
NON-GAAP NON-GAAP NON-GAAP
------------ ------------ ------------
Alvarion Cellular
Standalone Mobile Unit Consolidated
------------- ------------- ------------
For the
Three period Three
Months December 9 Months
Ended through Ended
December 31, December 31, December 31,
------------ ------------ ------------
2004 2004 2004
------------ ------------ ------------
Sales $ 54,302 $ 1,576 $ 55,878
Cost of sales 30,049 1,279 31,328
------------ ------------ ------------
Gross profit 24,253 297 24,550
------------ ------------ ------------
Operating expenses:
Research and development,
net 7,116 482 7,598
Selling and marketing 9,712 290 10,002
General and administrative 2,364 299 2,663
------------ ------------ ------------
Total Operating expenses 19,192 1,071 20,263
------------ ------------ ------------
Operating income (loss) 5,062 (774) 4,288
Financial income, net 1,160 (41) 1,119
------------ ------------ ------------
Net Income (loss ) $ 6,222 $ (815) $ 5,407
============ ============ ============
Basic earnings per share $ 0.11 $ - $ 0.09
============ ============ ============
Weighted average number of
shares used in computing
basic earnings per share 57,619 - 57,619
============ ============ ============
Diluted earnings per share $ 0.10 $ - $ 0.08
============ ============ ============
Weighted average number of
shares used in computing
diluted earnings per share 64,447 - 64,447
============ ============ ============
RECONCILIATION TO US GAAP
----------------------------
As reported Non-GAAP net
income $ 5,407
Amortization of acquired
current technology,
customer relationships and
trademarks 772
Amortization of deferred
stock compensation 27
In Process Research &
Development write-off 10,993
Acquisition related expenses 369
------------
Net loss $ (6,755)
------------
Basic loss per share $ (0.12)
============
Weighted average number of
shares used in computing
basic loss per share 57,619
============
Diluted loss per share $ (0.12)
============
Weighted average number of
shares used in computing
diluted loss per share 57,619
============
ALVARION LTD.& ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Three
Months ended
December 31,2004
------------------
Cash flows from operating activities:
Net Loss $ (6,755)
Adjustments to reconcile net income to net cash
used by operating activities:
Merger related expenses 369
Depreciation 1,077
Amortization of deferred stock compensation 27
Unrealized gain from derivative financial instruments 43
Amortization of intangibles 11,765
Increase in trade receivables (4,295)
Decrease in other accounts receivable and prepaid
expenses 1,513
Increase in inventories (1,279)
Increase in trade payables 3,313
Decrease in long term receivables 203
Decrease in other accounts payables and accrued
expenses (757)
Trade payables related to the acquisition 2,680
Accrued severance pay, net 705
------------------
Net cash provided by operating activities 8,608
Cash flows from investing activities:
Purchase of fixed assets (730)
------------------
Net cash used in investing activities (730)
Cash flows from financing activities:
Proceeds from exercise of employees' stock options,
net of expenses 2,642
------------------
Net cash provided by financing activities 2,642
Cash flows from non-recurring activities:
IWAV Acquisition (45,149)
Cash used to trade payables related to the
acquisition (2,680)
Merger related expenses (369)
------------------
Net cash used in non-recurring activities (48,198)
------------------
Increase in cash, cash equivalents, short-term and
long-term investments (37,677)
IWAV cash reserves as of the closing 431
Cash, cash equivalents, short-term and long-term
investments at the beginning of the period 169,928
------------------
Cash, cash equivalents, short-term and long-term
investments at the end of the period $ 132,682
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