UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2005
Commission File Number: 0-30628
ALVARION LTD.
--------------------------------------------------------------------------------
(Translation of registrant's name into English)
21A Habarzel Street, Tel Aviv 69710, Israel
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(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F |_|
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes |_| No |X|
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-___________
The following are included in this report on Form 6-K:
Sequential
Exhibit Description Page Number
------- ----------- -----------
1. Press release on ALVARION REPORTS
THIRD QUARTER 2005 RESULTS,
dated November 9, 2005 8
----------------
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALVARION LTD.
Date: November 9, 2005 By: /s/ Dafna Gruber
---------------------------------
Name: Dafna Gruber
Title: Chief Financial Officer
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Contacts
ALVARION ALVARION
Dafna Gruber, CFO, 650 314 2652
+972-3-645 6252 Carmen Deville, 650 314 2653
dafna.gruber@alvarion.com carmen.deville@alvarion.com
------------------------- ---------------------------
ALVARION REPORTS THIRD QUARTER 2005 RESULTS
BreezeMAX(TM) Leads the Industry in Deployments Reaching 20% of Q3 Revenue
TEL AVIV, Israel--November 9, 2005 -- Alvarion Ltd. (NASDAQ: ALVR), the leading
provider of wireless broadband solutions and specialized mobile networks, today
announced financial results for the third quarter ended September 30, 2005.
Revenue for the third quarter reached $45.0 million, down 4% sequentially from
$47.0 million in the second quarter of 2005, and down 14% from $52.2 million in
the third quarter of 2004. Q3 revenue continued to show the effect of a major
product transition from proprietary solutions to ones based on the 802.16
standard. The comparison with Q3 2004, primarily reflects the impact of a single
large customer which accounted for approximately 30% of revenue in the year ago
period. Excluding the impact of the large customer in Q3 2004, revenue increased
more than 20% in Q3 2005 versus the year earlier period, reflecting addition of
the compact cellular business and broad-based demand for wireless broadband
solutions, including BreezeMAX, Alvarion's WiMAX platform. Gross margin was 45%
in Q3 of 2005, consistent with Alvarion's target operating model.
On a GAAP basis, the company reported a net loss of $(5.5) million, or ($0.09)
per share. This compares with net loss of $(3.6) million, or $(0.06) per share
in Q2 and net income of $3.7 million, or $0.06 per diluted share in the third
quarter of 2004.
Excluding amortization of acquired intangibles and deferred stock compensation
of an aggregate of $1.1 million in the third and second quarter of 2005, and
$0.7 million in the third quarter of 2004, on a non-GAAP basis, Q3 net loss was
$)4.4( million, or ($0.07) per share, compared with net loss of $(2.5) million,
or $(0.04) per share in the prior quarter, and a non-GAAP net profit of $4.4
million, or $0.07 per diluted share in Q3 of 2004. See attached table showing
the reconciliation of GAAP to non-GAAP figures.
Comments of Management
"Q3 included several important achievements including the excellent demand for
our new subscriber unit using Intel's WiMAX chip during its first month of
availability and the recent
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large orders secured for our cellular mobile solution," said Tzvika Friedman,
CEO of Alvarion. "We view these as positive signs for the future.
"We continue to invest aggressively for our long-term future. Our increase in
operating expenses versus a year ago reflects our focus on the successful
integration of the compact cellular operations plus a very strong commitment to
future versions of the 802.16 standard and the development of portable and
mobile WiMAX solutions.
"From a strategic perspective, our progress is demonstrated by more than 30
commercial deployments of our solution based on the 802.16 WiMAX standard.
BreezeMAX revenue grew again in Q3 to reach 20% of total revenue. Our advanced,
feature-rich solution, combined with our depth of experience and clear roadmap,
is responsible for our leading the industry in commercial deployments and
WiMAX-related revenue. The next milestone will be the first shipments of our
advanced indoor self-install version of the Intel-based CPE with switching
antennas and subchannelization support. We believe that the availability of
self-install products will be a catalyst for growth of the industry and of our
growth next year."
Strategic Initiatives
"There are several elements of our strategy to grow revenue and improve
profitability," continued Mr. Friedman. "We plan to maintain and reinforce our
position as the market leader in fixed wireless broadband by continuing to
introduce standards-based, feature-rich solutions that improve the business case
of the operators. We also intend to leverage our technology, know-how, brand
name recognition, and our position as the largest player in broadband wireless
access business, plus our field-experience and strategic relationships, to
become an early leader in the promising area of mobile WiMAX. Mobile broadband
will be a very large market and we believe that it will be served by multiple
technologies, including WiMAX. We see attractive opportunities in both fixed and
mobile WiMAX, and everything in-between such as portable solutions, for years to
come.
"To accelerate our growth in the compact cellular market, we will continue
utilizing our operating skills to expand channels, improve processes, and
continue product innovation. Projects like the ones with Outremer and Cable &
Wireless clearly demonstrate that we are gaining traction and we are optimistic
about winning additional projects.
"Next year we will transition to a more decentralized structure with fewer
layers of management as part of organizing the company to focus all types of
fixed broadband wireless access, portable and mobile WIMAX, and compact cellular
solutions," added Mr. Friedman. "We will have three operating units: Broadband
Wireless Access, Cellular Mobile and Broadband Mobile, each with its own R&D,
business development and marketing functions and with a senior executive in
charge of the unit. In addition, we will have a single sales and support unit
that will be responsible for all customers across all product lines, as well as
a unified corporate operations group to improve efficiency and promote best
practices across the entire organization. We are
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creating a structure that puts strong managers in charge of each of our key
initiatives, enables us to maintain the flexibility to adjust to changing market
dynamics, and supports our future growth."
Q4 Guidance
The Company's revenue guidance for Q4 2005 is $45 million to $50 million. At
this revenue range, per share results are expected to range between a loss of 5
and 9 cents per share, while the non-GAAP loss per share, which excludes
amortization of intangibles and deferred stock compensation, is expected to
range between 3 and 7 cents.
Alvarion's management will host a conference call today, November 9, 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: (612) 332-0228; International: +1-(612) 332-0228.
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 12:30 p.m. EDT on November 9 through 11:59 p.m. EDT on November
16, 2005. 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: 798762.
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, corporate VPNs, toll
quality telephony, mobile base station feeding, hotspot coverage extension,
community interconnection, 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 10 years from core technology developments to creating
and promoting industry standards. Leveraging its key roles in the IEEE and
HiperMAN standards committees and experience in deploying OFDM-based systems,
the Company's prominent work in the WiMAX Forum(TM) is focused on increasing the
widespread adoption of standards-based products in the wireless broadband market
and leading the entire industry to mobile WiMAX solutions.
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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" provisions of the Private Securities Litigation Reform Act 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: inability to further identify, develop and achieve market success
for new products, services and technologies, including the WiMAX and cellular
mobile product offerings; 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 to third parties
has not been independently verified 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 Deville, Investor Relations: carmen.deville@alvarion.com or
+1.650.314.2653.
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ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
2005 2004
------------ -----------
ASSETS
Cash, cash equivalents, short-term and
long-term investments $121,354 $132,682
Trade receivables 37,121 28,148
Other accounts receivable 7,238 6,492
Inventories 45,592 41,328
Severance pay fund 7,532 7,025
Long-term receivables 365 456
PROPERTY AND EQUIPMENT, NET 11,624 11,925
GOODWILL AND OTHER INTANGIBLE ASSETS 97,203 100,479
-------- --------
TOTAL ASSETS $328,029 $328,535
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 35,177 $ 26,481
Other accounts payable and accrued
expenses 53,451 55,611
-------- --------
Total current liabilities 88,628 82,092
LONG TERM LIABILITIES 1,725 3,505
ACCRUED SEVERANCE PAY 10,614 10,126
-------- --------
TOTAL LIABILITIES 100,967 95,723
SHAREHOLDERS' EQUITY 227,062 232,812
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $328,029 $328,535
======== ========
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ALVARION LTD.& ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Nine Nine Three Three Three
Months Months Months Months Months
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, June 30,
------------ ------------ ------------ ------------ --------
2005 2004 2005 2004 2005
------------ ------------ ------------ ------------- --------
Sales $ 149,232 $ 145,629 $ 45,016 $ 52,178 $ 46,983
Cost of sales 80,808 82,413 24,917 29,049 25,152
--------- --------- --------- --------- ---------
Gross profit 68,424 63,216 20,099 23,129 21,831
--------- --------- --------- --------- ---------
Operating expenses:
Research and development, net 29,142 20,218 9,748 6,744 10,038
Selling and marketing 36,210 29,036 12,150 10,543 12,071
General and administrative 8,967 7,019 3,193 2,412 2,924
Amortization of acquired
current technology,
customer relationships
and trademarks 3,278 2,007 1,091 669 1,093
Amortization of deferred
stock compensation 552 33 11 11 11
Acquisition related expenses 868 -- -- -- --
--------- --------- --------- --------- ---------
Total Operating expenses 79,017 58,313 26,193 20,379 26,137
--------- --------- --------- --------- ---------
Operating income (loss) (10,593) 4,903 (6,094) 2,750 (4,306)
Financial income, net 1,870 2,702 576 920 745
--------- --------- --------- --------- ---------
Net Income (loss) $ (8,723) $ 7,605 $ (5,518) $ 3,670 $ (3,561)
--------- --------- --------- --------- ---------
Basic earnings (loss)
per share $ (0.15) $ 0.14 $ (0.09) $ 0.06 $ (0.06)
========= ========= ========= ========= =========
Weighted average number
of shares used in
computing basic
earnings (loss) per share 58,513 56,190 58,983 56,885 58,463
========= ========= ========= ========= =========
Diluted earnings (loss)
per share $ (0.15) $ 0.12 $ (0.09) $ 0.06 $ (0.06)
========= ========= ========= ========= =========
Weighted average number
of shares used in
computing diluted
earnings (loss)
per share 58,513 63,598 58,983 63,837 58,463
========= ========= ========= ========= =========
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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 AND OTHER ACQUISITION RELATED EXPENSES
U.S. dollars in thousands (except per share data)
Nine Nine Three Three Three
Months Months Months Months Months
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, June 30,
------------ ------------ ------------ ------------ --------
2005 2004 2005 2004 2005
------------ ------------ ------------ ------------- --------
Net Income (loss)
according to US GAAP $ (8,723) $ 7,605 $ (5,518) $ 3,670 $ (3,561)
Amortization of
acquired current
technology, customer
relationships and trademarks 3,278 2,007 1,091 669 1,093
Amortization of deferred
stock compensation 552 33 11 11 11
Acquisition related expenses 868 -- -- -- --
-------- -------- -------- -------- --------
Net Income (loss) excluding
amortization of intangibles
and deferred stock
compensation and acquisition
related expenses $ (4,025) $ 9,645 $ (4,416) $ 4,350 $ (2,457)
======== ======== ======== ======== ========
Basic net earnings
(loss) per share, excluding
amortization of
intangibles and
deferred stock
compensation and
acquisition related
expenses $ (0.07) $ 0.17 $ (0.07) $ 0.08 $ (0.04)
======== ======== ======== ======== ========
Weighted average number
of shares used in
computing basic net
earnings (loss) per share 58,513 56,190 58,983 56,885 58,463
======== ======== ======== ======== ========
Diluted net earnings
(loss) per share,
excluding amortization
of intangibles and
deferred stock
compensation and
acquisition related
expenses $ (0.07) $ 0.15 $ (0.07) $ 0.07 $ (0.04)
======== ======== ======== ======== ========
Weighted average number
of shares used in
computing diluted net
earnings (loss) per share 58,513 63,598 58,983 63,837 58,463
======== ======== ======== ======== ========
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ALVARION LTD.& ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three
Months ended
September 30,
-------------
2005
-------------
Cash flows from operating activities:
Net loss $ (5,518)
Adjustments to reconcile net income to net cash used
by operating activities:
Depreciation 1,341
Amortization of deferred stock compensation 11
Unrealized gain from derivative financial instruments 191
Amortization of intangibles 1,091
Increase in trade receivables (694)
Increase in other accounts receivable and prepaid
expenses (1,428)
Increase in inventories (5,950)
Increase in trade payables 3,166
Decrease in Long term receivables 26
Increase in other accounts payables and accrued
expenses 4,969
Accrued severance pay, net (126)
---------
Net cash used in operating activities (2,921)
Cash flows from investing activities:
Purchase of fixed assets (1,051)
---------
Net cash used in investing activities (1,051)
Cash flows from financing activities:
Proceeds from exercise of employees' stock options 408
---------
Net cash provided by financing activities 408
---------
Decrease in cash, cash equivalents, short-term and
long-term investments (3,564)
---------
Cash, cash equivalents, short-term and long-term
investments at the beginning of the period 124,918
---------
Cash, cash equivalents, short-term and long-term
investments at the end of the period $ 121,354
=========
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