Alvarion reports Q1 2012 results

Alvarion (NASDAQ:ALVR), a provider of optimised wireless broadband solutions addressing the connectivity, coverage and capacity challenges of public and private networks, has announced its financial results for the first quarter of 2012.

Q1 highlights:

* Revenue of $33.3 million, a 19% sequential decrease.
* Gross margin of 40.2%, an increase from gross margin of 38.3% in Q4 of 2011.
* GAAP net loss of $0.11 per share; non-GAAP net loss of $0.09 per share.
* The company is now referring to its lines of business as follows:
* Carrier licensed solutions (access solutions in licensed frequencies primarily based on WiMax), approximately 50% of total revenue in Q1.
* Vertical solutions (mainly licence-exempt access solutions for non-carrier private networks such as municipalities and enterprises), approximately 30% of total revenue in Q1.
* Carrier unlicensed solutions (solutions for access, cellular offload, and in-building coverage for mobile carrier networks using licence-exempt frequencies), approximately 20% of total revenue in Q1.

In the first quarter of 2012, revenue was $33.3 million, a decrease of 19.2% from $41.2 million in the fourth quarter of 2011, and a decrease of 28.4% from $46.5 million in the first quarter of 2011.

GAAP net loss in the first quarter of 2012 was $6.9 million, or $0.11 per share. This compares to a net loss of $12.2 million, or $0.20 per share in the fourth quarter of 2011, which includes charges of approximately $9.3 million related to the Wavion acquisition and integration plan.

GAAP net loss in the first quarter of 2011 was $14.5 million, or $0.23 per share, including restructuring and other charges of approximately $7.1 million related mainly to employee termination expenses and vacating office space.

On a non-GAAP basis, excluding stock-based compensation and other charges, the company reported a net loss of $5.4 million, or $0.09 per share, compared with a non-GAAP net loss of $2.4 million, or $0.04 per share, in the fourth quarter of 2011, and a non-GAAP net loss of $6.5 million, or $0.10 per share, in the first quarter of 2011.

Cash used in operations in the first quarter of 2012 was $11.2 million. As of 31 March 2012, cash, cash equivalents and investments totalled $51.6 million.

Management comments:

“We continue to be pleased by the revenue growth represented by products for licence exempt frequencies acquired in the Wavion transaction,” said Hezi Lapid, President and Chief Executive Officer of Alvarion. “Demand from both carrier and private network customers remain strong, and after only one full quarter of contribution, these products are on track to exceed our expectations this year.

“We also expect to benefit from a growing demand from targeted vertical markets once our new products for this segment are introduced. Meanwhile, we are doing our best to mitigate the impact of lower than expected sales of the older products,” continued Lapid.

“Our revenues from RAN solutions in licensed frequencies were slightly lower than expected during the first quarter. We are exploring a variety of options for the carrier licensed business, emphasising that we believe these are significant and valuable assets. Every alternative we are evaluating will provide continuity of products and services to our customer base.

“With a clear mandate from the board to improve execution and enhance shareholder value, we are also moving swiftly to make necessary adjustments in order to generate positive cash flow from operations. We expect revenue growth and improving profitability in the combined unlicensed business, and we are aiming for a significant reduction in cash used in operating activities in Q3, followed by at least breakeven operating cash flow in Q4. We will continue updating our investors in the near future about refinements to our plans and performance targets,” concluded Lapid.

Management believes revenue in the second quarter of 2012 will be in the range of $31 million to $38 million. Depending on shipment volume and mix, second quarter non-GAAP per share results are expected to range between a loss of $0.06 and $0.13. The GAAP per share results are expected to range between a loss of $0.08 and $0.15, before any one-time charges.