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 February 2006
Commission File Number: 0-30628
ALVARION LTD.
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(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
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1. Press release on ALVARION REPORTS
FOURTH QUARTER AND FULL YEAR 2005
RESULTS dated February 8, 2006 4
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: February 8, 2006 By: /s/ Dafna Gruber
-------------------------------
Name: Dafna Gruber
Title: Chief Financial Officer
Exhibit 1
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 FOURTH QUARTER AND FULL YEAR 2005 RESULTS
Resumed sequential growth; BreezeMAXTM Leadership Continues
TEL AVIV, Israel--February 8, 2006 -- Alvarion Ltd. (NASDAQ: ALVR), the world's
leading provider of wireless broadband solutions and specialized mobile
networks, today announced financial results for the fourth quarter and full year
ended December 31, 2005.
Revenue for the fourth quarter reached $46.5 million, up 3% sequentially from
$45.0 million in the third quarter of 2005. Revenue in Q4 2005 declined 17% from
$55.9 million in the fourth quarter of 2004, primarily reflecting a higher
revenue contribution from one large customer during the fourth quarter of 2004.
Gross margin was 45% in Q4 of 2005, consistent with Alvarion's target operating
model.
On a GAAP basis, the company reported a net loss of $(4.9) million, or ($0.08)
per share. This compares with a net loss of $(5.5) million, or $(0.09) per share
in Q3 and a net loss of ($6.8) million, or ($0.12) per share in the fourth
quarter of 2004, which included charges of $11.4 million representing a
write-off of in-process research and development and acquisition related
expenses.
Excluding amortization of acquired intangibles and deferred stock compensation
of an aggregate of $1.1 million in the fourth and third quarters of 2005, and
$0.8 million in the fourth quarter of 2004 as well as acquisition-related
charges of $11.4 million in the fourth quarter of 2004, on a non-GAAP basis, Q4
2005 net loss was $(3.8) million, or ($0.06) per share, compared with a net
loss of ($4.4) million, or ($0.07) per share in the third quarter of 2005, and a
non-GAAP net profit of $5.4 million, or $0.08 per diluted share in Q4 of 2004.
See the attached table showing the reconciliation of GAAP to non-GAAP figures.
Revenue for 2005 was $195.7 million compared with $201.5 million in 2004. Taking
into account a very large deployment by Alvarion's largest customer in 2004,
revenues from Broadband Wireless Access solutions, including BreezeMAX,
Alvarion's flagship WiMAX platform, increased by 20% in 2005 over 2004.
On a GAAP basis, the company reported a net loss of ($13.6) million, or ($0.23)
per share in 2005. This compares with a net income of $0.9 million, or $0.01 per
share in 2004.
Excluding amortization of acquired intangibles and deferred stock compensation
of an aggregate of $4.9 million and $2.8 million in 2005 and 2004, respectively,
as well as acquisition-related charges of $0.9 million and $0.4 million in 2005
and 2004, respectively, and $11 million of in-process research and development
write-off in 2004, on a non-GAAP basis, 2005 net loss was ($7.8) million, or
($0.13) per share, compared with a net income of $15.1 million, or $0.24 per
share in the prior year. See the attached table showing the reconciliation of
GAAP to non-GAAP figures.
Comments of Management
"We are pleased that we resumed sequential growth in Q4," said Tzvika Friedman,
CEO and President of Alvarion. "Broadband wireless access revenue increased for
both WiMAX and non-WiMAX based solutions in Q4.
"We were particularly gratified by the continued strong performance of our
BreezeMAX product, which increased to about $10 million in revenue in Q4. Our
fundamental business, primarily wireless DSL solutions, is performing well
during the transition to WiMAX and should continue to be the main engine for
growth in 2006. We have strengthened our position with some of the carriers we
refer to as "innovative challengers" because they are early adopters of new
technology, and we expect the overall upward trend to continue.
"Other significant developments in Q4 included the successful launch of the
largest ever project for our cellular mobile unit, complete networks for the
islands of Guadeloupe and Martinique by Outremer Telecom. We believe this will
be an important reference account that will help us land more large orders for
the cellular mobile unit. In addition, a major Latin American customer has
placed an initial $7 million order under a new frame agreement that could be
worth up to $15 million, covering both BreezeMAX(TM) and eMGW(TM) products for
several countries in Latin America.
"The fixed broadband wireless access market - both WiMAX and non-WiMAX - will be
an important and growing market for the next several years," continued Mr.
Friedman. "We continue to dominate the BWA market where we retain a 30% market
share. Our leading position is evidence of our customers' satisfaction with our
superior product offering and support.
"We continue to invest in building our company to be a major player in the
growing WiMAX market for fixed, nomadic and mobile applications. We are focusing
our investment on aggressively expanding our family of WiMAX solutions to
include additional frequencies, additional marketing activities with Tier 1
carriers, mobile WiMAX development, affording our
customers a smooth migration path to the recently ratified 802.16e standard, and
development to enable an array of new services.
"While we continue our focus on retaining our leadership in this market, we will
also pursue our commitment to realizing the vision of personal broadband to
enhance lifestyles and improve productivity with our mobile WiMAX solutions.
Moving true broadband from an entirely facilities-based offering to one that is
an `anytime, anywhere' personal offering will create a host of new opportunities
in the telecom ecosystem. We are positioning Alvarion to be the partner of
choice for operators, both new and incumbent, technology partners, and systems
integrators as the market evolves."
Q1 Guidance
The Company's revenue guidance for Q1 2006 is $46 million to $51 million. At
this revenue range, non GAAP per share results are expected to range between a
loss of 3 and 6 cents per share. This guidance excludes expenses related to
amortization of acquired intangibles and estimated recurring quarterly stock
option expenses resulting from the adoption of SFAS 123R. Also excluded from
non-GAAP guidance is a one-time positive cumulative effect of a change in
accounting principle under SFAS 123R which cannot be quantified at this time.
Since it is too early to indicate the impact of this one-time positive
cumulative effect, the company will not provide GAAP earnings per share
guidance.
Alvarion's management will host a conference call today, February 8, 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) 332-1213, International: +1-612-332-1213.
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 February 8, 2006 through 11:59 p.m. EDT on
February 14, 2006. 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: 813525.
About Alvarion
With more than 2 million units deployed in 140 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.
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.
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.
ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2005 2004
------------ -----------
ASSETS
Cash, cash equivalents,short-term and
long-term investments $114,320 $132,682
Trade receivables 39,271 28,148
Other accounts receivable 6,179 6,492
Inventories 43,363 41,328
Severance pay fund 7,685 7,025
Long-term receivables -- 456
PROPERTY AND EQUIPMENT, NET 11,072 11,925
GOODWILL AND OTHER INTANGIBLE ASSETS 96,112 100,479
-------- --------
TOTAL ASSETS $318,002 $328,535
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 29,093 $ 26,481
Other accounts payable and accrued
expenses 52,807 55,611
-------- --------
Total current liabilities 81,900 82,092
LONG TERM LIABILITIES 1,749 3,505
ACCRUED SEVERANCE PAY 11,007 10,126
-------- --------
TOTAL LIABILITIES 94,656 95,723
SHAREHOLDERS' EQUITY 223,346 232,812
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $318,002 $328,535
======== ========
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
December 31 December 31 December 31 December 31 September 31
---------- --------- --------- --------- ---------
2005 2004 2005 2004 2005
--------- --------- --------- --------- ---------
Sales $ 195,715 $ 201,507 $ 46,483 $ 55,878 $ 45,016
Cost of sales 106,439 113,741 25,631 31,328 24,917
--------- --------- --------- --------- ---------
Gross profit 89,276 87,766 20,852 24,550 20,099
--------- --------- --------- --------- ---------
Operating expenses:
Research and
development, net 38,921 27,816 9,779 7,598 9,748
Selling and marketing 48,794 39,038 12,584 10,002 12,150
General and
administrative 11,919 9,681 2,950 2,663 3,193
Amortization of
acquired current
technology,customer
relationships and
trademarks 4,367 2,779 1,091 772 1,091
Amortization of
deferred stock
compensation 563 60 11 27 11
In Process Research
& Development write-off -- 10,993 -- 10,993 --
Acquisition related expenses 868 369 -- 369 --
--------- --------- --------- --------- ---------
Total Operating expenses 105,432 90,736 26,415 32,424 26,193
--------- --------- --------- --------- ---------
Operating loss (16,156) (2,970) (5,563) (7,874) (6,094)
Financial income,
net 2,551 3,821 681 1,119 576
--------- --------- --------- --------- ---------
Net Income (loss) $ (13,605) $ 851 $ (4,882) $ (6,755) $ (5,518)
--------- --------- --------- --------- ---------
Basic earnings
(loss) per share $ (0.23) $ 0.02 $ (0.08) $ (0.12) (0.09)
========= ========= ========= ========= =========
Weighted average
number of shares
used in computing
basic earnings
(loss) per share 58,688 56,549 59,206 57,619 58,983
========= ========= ========= ========= =========
Diluted earnings
(loss) per share $ (0.23) $ 0.01 $ (0.08) $ (0.12) (0.09)
========= ========= ========= ========= =========
Weighted average
number of shares
used in computing
diluted earnings
(loss) per share 58,688 63,754 59,206 57,619 58,983
========= ========= ========= ========= =========
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 & 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
December 31 December 31 December 31 December 31 September 31
---------- --------- --------- --------- ---------
2005 2004 2005 2004 2005
--------- --------- --------- --------- ---------
Net Income (loss)
according to US
GAAP $(13,605) $ 851 $ (4,882) $ (6,755) $ (5,518)
Amortization of
acquired current
technology, customer
relationships and
trademarks 4,367 2,779 1,091 772 1,091
Amortization of deferred
stock compensation 563 60 11 27 11
Three Three Three
Year Year Months Months Months
ended ended Ended Ended Ended
December 31 December 31 December 31 December 31 September 31
---------- --------- --------- --------- ---------
2005 2004 2005 2004 2005
--------- --------- --------- --------- ---------
Acquired In-Process
Research & Development
write-off -- 10,993 -- 10,993 --
Acquisition related
expenses 868 369 -- 369 --
-------- -------- -------- -------- --------
Net Income (loss)
excluding
amortization of
intangibles and
deferred stock
compensation,
acquired in-process
research &
development write-
off and acquisition
related expenses $ (7,807) $ 15,052 $ (3,780) $ 5,406 $ (4,416)
======== ======== ======== ======== ========
Basic net earnings
(loss) per share,
excluding
amortization of
intangibles and
deferred stock
compensation,
acquired in-process
research &
development write-
off and acquisition
related expenses $ (0.13) $ 0.27 $ (0.06) $ 0.09 $ (0.07)
======== ======== ======== ======== ========
Weighted average
number of shares
used in computing
basic net earnings
(loss) per share 58,688 56,549 59,206 57,619 58,983
======== ======== ======== ======== ========
Diluted net earnings
(loss) per share,
excluding
amortization of
intangibles and
deferred stock
compensation,
acquired in-process
research &
development
write-off and
acquisition related
expenses $ (0.13) $ 0.24 $ (0.06) $ 0.08 $ (0.07)
======== ======== ======== ======== ========
Weighted average
number of shares
used in computing
diluted net earnings
(loss) per share 58,688 63,754 59,206 64,447 58,983
======== ======== ======== ======== ========
ALVARION LTD. & ITS SUBSIDIARIES
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Three
Months ended
December 31, 2005
-----------------
Cash flows from operating activities:
Net loss $ (4,882)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 1,227
Amortization of deferred stock compensation 11
Amortization of intangibles 1,091
Increase in trade receivables (2,150)
Decrease in other accounts receivable and prepaid
expenses 1,409
Decrease in inventories 2,229
Decrease in trade payables (6,084)
Decrease in Long term receivables 365
Decrease in other accounts payables and accrued
expenses (620)
Accrued severance pay, net 240
---------
Net cash used in operating activities (7,164)
Cash flows from investing activities:
Purchase of fixed assets (675)
---------
Net cash used in investing activities (675)
Cash flows from financing activities:
Proceeds from exercise of employees' stock options 805
---------
Net cash provided by financing activities 805
---------
Decrease in cash, cash equivalents, short-term and
long-term investments (7,034)
---------
Cash, cash equivalents, short-term and long-term
investments at the beginning of the period 121,354
---------
Cash, cash equivalents, short-term and long-term
investments at the end of the period $ 114,320
=========