Press Releases

Alvarion Reports First Quarter 2002 Results

Tel-Aviv, Israel, May 2, 2002 – Alvarion Ltd. (NASDAQ: ALVR), a leading provider of Broadband Wireless Access (BWA) solutions, today announced its financial results for the first quarter ended March 31, 2002.

Note: The Company’s statement of operations is based on U.S. GAAP. The Company was formed on August 1, 2001 through the merger of BreezeCOM Ltd. and Floware Ltd. As such, the Company’s results for the first quarter of 2001 include the results of BreezeCOM Ltd. only.

Revenues for the first quarter of 2002 (which, as noted above, include revenues from both the former BreezeCOM and the former Floware) were $22.7 million, compared with $25.2 million for the fourth quarter of 2001 (which also includes revenues from both former companies) and $23.9 million for the first quarter of 2001 (for BreezeCOM alone).

Net loss for the first quarter of 2002 was $(5.5) million, or $(0.10) per share, compared with $(16.6) million, or $(0.30) per share, for the fourth quarter of 2001, and net income of $63,000 or $0.00 per diluted share, in the first quarter of 2001 (for BreezeCOM only).

If amortization of current technology and deferred stock compensation ($752,000) were excluded from the Company’s first quarter 2002 results, the net loss for the quarter would have been $(4.8) million, or $(0.09) per share. This compares with a net loss of $(5.6) million, or $(0.10) per share, in the fourth quarter of 2001, excluding amortization and other non-recurring expenses of $11.0 million.

Cash reserves as of March 31, 2002 were $179.2 million, compared with $183.0 million as of December 31, 2001.

Commenting on the first quarter, Zvi Slonimsky, CEO of Alvarion, stated, "We are pleased to report that our revenues and margins were in line with our forecasts. This, together with the significant decline in our operating expenses, enabled us to reduce our cash burn and net loss compared with the fourth quarter. Total operating expenses on a pro-forma basis for the first three months of 2002 were $15.0 million, compared with $16.6 million in the fourth quarter of 2001."

During the quarter, we shipped approximately 30,000 units of our products to established carriers and service providers in more than 70 countries around the world, enabling us to mark the milestone of the installation of our 500,000th unit. This accomplishment establishes Alvarion’s positioning even more firmly as the leader of the BWA market.

"Although visibility in the market is still low and lead times, especially for new projects, are still long, we are encouraged to see the reawakening of activity in many regions, and are cautiously optimistic that the worst is behind us. During the quarter, a number of BWA projects were initiated by new customers, especially in the developing regions."

Mr. Slonimsky continued, "We continue to invest in R&D. This quarter, we have progressed from the launch phase to the commercial deployment phase of three new products, namely, our pioneering BreezeACCESS™ OFDM (Orthogonal Frequency Division Multiplexing) solution, BreezeACCESS™ SU-R, and AlvariBase™, all of which have enjoyed a positive reception by new and existing customers. This wide variety of products improves our ability to address our customers’ business model needs."

Mr. Slonimsky concluded, "Overall, we are proud of our solid performance despite tough markets, and are optimistic as we look to the future. We are confident that our more comprehensive product offering and extensive market presence will enable us both to take full advantage of improving market trends, and to benefit from our leadership position in the BWA market."

The Company will hold a teleconference today, May 2, 2002, at 9:00 a.m. EDT to discuss the quarter's results. To participate in the call, please dial (877) 780-2276 (in the U.S.), or (973) 628-9554 (internationally), approximately five minutes prior to the scheduled call start time. This call will also be available live as a Webcast on www.kcsa.com and www.alvarion.com. The Webcast will be archived and available for replay for 30 days.

About Alvarion
Alvarion is a premier provider of solutions based on Point-to-Multipoint (PMP) Broadband Wireless Access (BWA) used by telecom carriers, service providers, and enterprises worldwide. Alvarion systems provide Internet access and voice and data services in the last mile, cellular network feeding, building-to-building and wireless local area network (LAN) connectivity.

Alvarion offers the broadest range of BWA solutions by market segment and frequency band, designed to address all carriers’ and service providers’ business models. With its combined market experience, strong customer base, diversified distribution channels and field-proven deployments, Alvarion is a leading BWA pure play provider for every end user profile, from residential subscribers to business customers.

This press release may contain 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 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.

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