Alvarion reports Q3 2010 results

Alvarion, the world's leading provider of 4G networks in the broadband wireless access (BWA) market, today announced financial results for the third quarter of 2010.

Q3 highlights:
* Shipments of $63 million, a 9.1% sequential increase.
* Revenue of $54 million, a 10.2% sequential increase.
* GAAP net loss of $0.10 per share; non-GAAP net loss of $0.09 per share.

In the third quarter of 2010, total revenue was $54 million, an increase of 10.2% from $49 million in the second quarter of 2010, and a decrease of 7.5% from $58.4 million in the third quarter of 2009.

The decline in gross margin to 31.2% from 36.1% in the second quarter of 2010 and 47.2% in the third quarter of 2009 reflected a continued high proportion of third-party equipment, including subscriber devices, in the revenue mix, as well as greater impact from large projects compared with the prior period and the same quarter in 2009.

GAAP net loss in the third quarter of 2010 was $6.1 million, or $0.10 per share. This compares to a net loss of $10.6 million, or $0.17 per share in Q2 2010, including charges of approximately $3.6 million. GAAP net loss in the third quarter of 2009 was $1 million, or $0.02 per share.

Excluding the amortisation of intangibles, stock-based compensation, restructuring and other charges, net, on a non-GAAP basis, the company reported net loss of $5.4 million in the third quarter of 2010, or $0.09 per diluted share, compared with non-GAAP net loss of $6.7 million, or $0.11 per diluted share in the second quarter of 2010, and non-GAAP net income of $0.2 million, or $0.00 per diluted share in the third quarter of 2009.

Cash provided by operations was $2.2 million. As of 30 September 2010, cash, cash equivalents and investments totalled $93 million.

“We are pleased with the sequential increase in shipments and revenues from existing customers continuing to expand their networks and preparing to serve more subscribers,” said Eran Gorev, President and CEO of Alvarion. “These operators are satisfying increasing demand and implementing successful business models. We are also pleased with the progress we are making on our strategy to expand our relationship with our customers by supplying a complete turnkey solution. For example, after supplying equipment only for its initial deployment, we have now been engaged for a complete turnkey project for Linkem's second phase. In addition, we continue to make progress on a number of large projects in various regions, as evidenced by our recent deal with Barrett Xplore in Canada. On this project, we expect to begin recognising significant revenues only in 2011. We are proud of our team's demonstrated ability to win highly competitive deals facing world-class competition, at times even prevailing over an incumbent vendor. We are all working together to build on this success.”

Management continues to expect gradual improvement in shipments. Meanwhile, the company is not giving detailed guidance for Q4 because the timing of revenue from various projects cannot be predicted with accuracy.

Alvarion management hosted a conference call on 3 November to discuss the results and other matters. An archive of the Webcast of the conference call will be available on the Web site. For details, please visit Alvarion's Web site at http://www.alvarion.com.

A replay of the call will be available from 11am EDT on 3 November 2010 through 11:59am EDT on 3 December 2010.

To access the replay, please call:
International: +1(320) 365-3844.

To access the replay, users will need to enter the following code: 173235.

Alvarion has scheduled dates for the earnings announcements during 2010 and this schedule is available on the Web site at http://www.alvarion.com/index.php/en/investors.