Alvarion Reports Results for the Fourth Quarter and Full Year 2003; Record revenues plus net profit in Q4.Business Editors/High-Tech Writers 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--(BUSINESS WIRE)--Feb. 5, 2004 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 global leader in 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, today announced financial results for the fourth quarter and full year ended December December: see month. 31, 2003. Results of the Fourth Quarter Revenues for the fourth quarter of 2003 rose to a record $39.5 million, an increase of 15% compared to $34.3 million in the third quarter of 2003, and up 77% from $22.3 million in the fourth quarter of 2002. Gross margin increased for the 9th consecutive quarter, reaching 42.4% compared to 41.1% in the third quarter of 2003 and 38.9% in the fourth quarter of 2002. Growth in revenues and higher gross margins resulted in a net profit of $81,000, or $0.00 per share on a fully 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. basis for the fourth quarter of 2003. Net loss for the third quarter of 2003 was $(2.1) million, or $(0.04) loss per share and net loss for the fourth quarter of 2002 was $(5.4) million, or $(0.1) per share. Results for all periods include expenses attributable to the 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. , which totaled $706,000 in the fourth quarter of 2003, $650,000 in the third quarter of 2003, and $600,000 in the fourth quarter of 2002. The results also include amortization of deferred stock compensation totaling $91,000 in the fourth quarter of 2003, and $140,000 in both the third quarter of 2003 and the fourth quarter of 2002. Excluding all aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. amortizations, the Company's non-GAAP net income for the fourth quarter of 2003 was $878,000, or $0.02 per basic share and $0.01 per diluted share, compared to a non-GAAP net loss of $(1.3) million, or $(0.02) per share for the third quarter of 2003. Non-GAAP net loss for the fourth quarter of 2002 was $(3.5) million, or $(0.07) per share. Results of the Year Revenues for the year ended December 31, 2003 were $127.2 million, an increase of 43% compared with $88.8 million in 2002. Gross margin for 2003 increased to 41% compared to 38% in 2002. Net loss for 2003 was $(11.8) million, or $(0.23) per share, compared with a net loss of $(20.7) million, or $(0.38) per share for 2002. The results for the second, third, and fourth quarters of 2003 include the results of operations added following the acquisition of most of the assets and liabilities of InnoWave ECI ECI Employment Cost Index ECI Election Commission(er) of India ECI Enterprise Content Integration ECI Early Childhood Intervention ECI Environmental Change Institute Wireless Systems Ltd. ("InnoWave") on April 1, 2003. Amortization expenses totaled $3.1 million in 2003, and $3.0 million in 2002. The results of 2003 also included a $2.2 million charge related to the InnoWave acquisition, and the results of 2002 included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of $1.1 million. Excluding these amounts, the Company's non-GAAP net loss for 2003 would have been $(6.5) million, or $(0.12) per share, compared to a non-GAAP net loss of $(16.6) million, or $(0.31) per share for 2002. Comments of Management 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:
Our revenues have been rising steadily, a testament to growth in global broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). demand, increasing awareness of the BWA (Broadband Wireless Access) High-speed wireless access. Typically refers to wireless last mile access to the Internet. See WiMAX and broadband. value proposition, and Alvarion's leadership in the market. Our goal for 2004 is to increase revenues over 40% from the $127 million reported in 2003, with further progress toward our target financial model". "To further expand the market for our solutions, we are building on this strong foundation, leading the development of 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. standards-based solutions. WiMAX will enable interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. and multi-vendor solutions with improved price/performance characteristics that will allow BWA applications to answer the growing demand for broadband everywhere." Mr. Slonimsky concluded, "Some of the trends likely to support our continued growth include the development of the vast Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. and Indian markets, new rural broadband initiatives throughout Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , new
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. infrastructure initiatives in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Africa,
increasing broadband demand in Russia and Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. , and greater
penetration of broadband wireless See wireless broadband. solutions in the US.
"With our leading brand name and market position, the broadest BWA product portfolio, excellent partners, a decade of successful deployment experience and excellent financial condition, Alvarion is well-positioned to take advantage of these opportunities , lead the transition to standards-based solutions and help accelerate the growth of BWA." Q1 2004 Guidance The Company expects Q1 2004 revenues to range between $43 million and $45 million. At this revenues range, net earnings per share is expected to range between 1 and 2 cents, while non-GAAP net earnings per share, which excludes amortizations of intangible assets and deferred stock-based compensation, is expected to range between 2 and 3 cents. Alvarion's management will host a conference call today, February 5, 2004, at 9:00 a.m. Eastern Time to discuss the quarter's results. To participate in the call, please dial one of the following numbers approximately five minutes prior to the scheduled start time: USA: 612-332-0523, International +1-612-332-0523. 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 4 p.m. Eastern Time on February 5, 2004 through 11:59 p.m. Eastern Time on February 12, 2004. 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: 716970 About Alvarion Alvarion is dedicated to delivering seamless wireless broadband networking infrastructure to carriers, ISPs and private network operators, in order to leverage their broadband opportunities into sustainable profits. Alvarion offers premier wireless broadband solutions for access in the last mile, backhauling connection to the backbone through and through; thoroughly; entirely. - Lord Lytton. See also: Backbone and private network connectivity. Featuring the industry's most extensive range of products and international support, Alvarion is a pioneering leader of the converged wireless broadband network. With over 1.5 million units deployed in 130 countries worldwide, Alvarion provides secure rich-media networks for business or residential Internet access See how to access the Internet. , corporate VPNs, cellular base station feeding, 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 connectivity and extended Hotspots. Having recently acquired InnoWave's wideband access portfolio and expertise, Alvarion provides a complete wireless solution that supports a wide range of frequency bands, customer profiles and service types. For more information, visit Alvarion's World Wide Web site at www.alvarion.com This press release contains forward -looking statements 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 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. : 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 inability 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. 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. Use of Non-GAAP Financial Information To supplement its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, Alvarion uses non-GAAP measures of operating results, net income/loss and income/loss per share, which are adjusted to exclude certain costs, expenses, gains and losses that it believes are appropriate to enhance the overall understanding of its financial performance. These adjustments to Alvarion's GAAP results are made with the intent of providing both management and investors a supplemental understanding of its underlying operational results and trends. Adjusted non-GAAP results are among the primary indicators management uses as a basis for planning and forecasting Alvarion's business. The presentation of this additional information is not meant to be considered in isolation or as a substitute for Alvarion's financial results prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . 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, Investor Relations Investor relations The process by which the corporation communicates with its investors. : carmen.deville@alvarion.com or 760-517-3188. (Tables to Follow)
ALVARION LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2003 2002
------------- ------------
ASSETS
Cash, cash equivalents,short-term and
long-term investments $ 153,616 $ 162,663
Trade receivables 21,199 11,750
Other accounts receivable 4,499 4,872
Inventories 36,981 27,502
Severance pay fund 5,493 3,732
Long-term receivables 834 -
PROPERTY AND EQUIPMENT, NET 11,939 11,116
GOODWILL AND OTHER INTANGIBLE ASSETS 50,396 50,440
------------- ------------
TOTAL ASSETS $ 284,957 $ 272,075
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 23,780 $ 15,847
Other accounts payable and accrued
expenses 27,959 17,595
------------- ------------
Total current liabilities 51,739 33,442
LONG TERM LIABILITIES 5,248 5,357
ACCRUED SEVERANCE PAY 7,768 5,446
------------- ------------
TOTAL LIABILITIES 64,755 44,245
SHAREHOLDERS' EQUITY 220,202 227,830
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 284,957 $ 272,075
============= ============
ALVARION LTD.
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,
---------- ---------- --------- --------- ---------
2003 2002 2003 2002 2003
-------- -------- ------- ------- ---------
Sales $ 127,208 $ 88,849 $ 39,496 $ 22,314 $ 34,291
Cost of sales 75,097 55,370 22,750 13,635 20,181
-------- -------- ------- ------- ---------
Gross profit 52,111 33,479 16,746 8,679 14,110
-------- -------- ------- ------- ---------
Operating expenses:
Research and
development,
net 23,505 24,077 6,089 5,386 6,132
Selling and
marketing 32,904 26,570 8,912 6,624 8,684
General and
administrative 6,323 6,018 1,740 1,479 1,729
Amortization of
intangible
assets 2,606 2,400 706 600 650
Amortization of
deferred stock
compensation 511 580 91 140 140
Acquisition
related
expenses 2,201 - - - -
Restructuring
costs - 1,102 - 1,102 -
-------- -------- ------- ------- ---------
Total
Operating
expenses 68,050 60,747 17,538 15,331 17,335
-------- -------- ------- ------- ---------
Operating loss (15,939) (27,268) (792) (6,652) (3,225)
Financial
income, net 4,127 6,587 873 1,288 1,162
-------- -------- ------- ------- ---------
Net Income
(loss ) $ (11,812) $ (20,681) $ 81 $ (5,364) $ (2,063)
-------- -------- ------- ------- ---------
Basic earnings
(loss) per
share $ (0.23) $ (0.38) $ 0.00 $ (0.10) $ (0.04)
======== ======== ======= ======= =========
Weighted average
number of shares used in
computing basic
earnings (loss)
per share 52,127 53,941 53,219 52,521 52,254
======== ======== ======= ======= =========
Diluted earnings
(loss) per
share $ (0.23) $ (0.38) $ 0.00 $ (0.10) $ (0.04)
======== ======== ======= ======= =========
Weighted average number of shares
used in computing
diluted earnings
(loss) per share 52,127 53,941 62,252 52,521 52,254
======== ======== ======= ======= =========
ALVARION LTD.
DISCLOSURE OF NON-US GAAP NET INCOME (LOSS)
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,
-------- -------- -------- -------- ---------
2003 2002 2003 2002 2003
-------- -------- -------- -------- ---------
Net Income (loss)
according to
US GAAP $ (11,812) $ (20,681) $ 81 $ (5,364) $ (2,063)
Amortization
of intangible
assets 2,606 2,400 706 600 650
Amortization
of deferred
stock compensation 511 580 91 140 140
Acquisition
related
expenses 2,201 - - - -
Restructuring
costs - 1,102 - 1,102 -
-------- -------- -------- -------- ---------
Net Income
(loss), excluding amortization
of intangible assets and
deferred stock compensation,
restructuring costs and
acquisition related
expenses $ (6,494) $ (16,599) $ 878 $ (3,522) $ (1,273)
======== ======== ======== ======== =========
Basic net earnings (loss)
per share, excluding amortization
of intangible assets and
deferred stock compensation,
restructuring costs and
acquisition related
expenses $ (0.12) $ (0.31) $ 0.02 $ (0.07) $ (0.02)
======== ======== ======== ======== =========
Weighted average number of
shares used in computing basic
net earnings (loss) per
share 52,127 53,941 53,219 52,521 52,254
======== ======== ======== ======== =========
Diluted net earnings (loss) per
share, excluding amortization
of intangible assets and
deferred stock compensation,
restructuring costs and
acquisition related
expenses $ (0.12) $ (0.31) $ 0.01 $ (0.07) $ (0.02)
======== ======== ======== ======== =========
Weighted average number of
shares used in computing
diluted net earnings (loss)
per share 52,127 53,941 62,252 52,521 52,254
======== ======== ======== ======== =========
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