Press Releases

May 13, 2003

Alvarion Reports First Quarter 2003 Results

Tel � Aviv, Israel, May 13, 2003 � Alvarion Ltd. (NASDAQ: ALVR), a leading provider of Wireless Broadband solutions for Carriers, ISP�s and network operators, today announced its financial results for the first quarter ended March 31, 2003.

Revenues for the first quarter of 2003 were $22.4 million compared with $22.3 million for the fourth quarter of 2002 and $22.7 million for the first quarter of 2002. Net loss for the first quarter of 2003 decreased to $(4.0) million, or $(0.08) per share, from $(5.4) million, or $(0.10) per share, for the fourth quarter of 2002, and $(5.5) million, or $(0.10) per share, for the first quarter of 2002.

The Company�s results from all periods include amortization of current technology and deferred stock compensation. This amortization totaled $740,000 in the first quarter of 2003, $740,000 in the fourth quarter of 2002, and $752,000 in the first quarter of 2002. In addition, the Company�s results for the fourth quarter of 2002 included restructuring costs totaling $1.1 million. Excluding these amounts, the Company�s non U.S.-GAAP net loss for the first quarter of 2003 was $(3.2) million, or $(0.06) per share, while the non U.S.-GAAP net loss for the fourth quarter of 2002 was $(3.5) million, or $(0.07) per share, and the non U.S.-GAAP net loss for the first quarter of 2002 was $(4.8) million, or $(0.09) per share.

Cash reserves as of March 31, 2003 were $158.2 million, compared with $162.6 million as of December 31, 2002. During the quarter, cash used for operating activities decreased to $3.1 million, and approximately $1.3 million were invested in the Company�s stock repurchase plan.

Note: The results do not include the results of InnoWave ECI Wireless Systems Ltd. (�InnoWave�), which the Company acquired on April 1, 2003. InnoWave�s results will be fully consolidated within the Alvarion�s results beginning in the second quarter of 2003.

Comments of Management

Commenting on the first quarter, Zvi Slonimsky, CEO of Alvarion, said, �The Alvarion team has delivered another quarter of strong revenues and across-the-board metric improvement. During the first quarter of 2003, we reinforced our leadership of a growing and consolidating industry while continuing to improve our gross margins and to reduce operating expenses, inventory balance, and cash burn.

�We continue to focus on developing regions and independent U.S. operators, markets characterized by expanding demand and fertile sales opportunities for our broadband wireless solutions. Lately, we have experienced strong demand from Central and Eastern Europe, areas where we recently announced orders for a WALKair� cellular feeding solution and a BreezeACCESS� OFDM access network. To take full advantage of our leading position in both the U.S. and worldwide and to meet dynamic market needs, we continue extending all of our product lines, with particular emphasis on the 5GHz and other solutions demanded by U.S. customers.�

Mr. Slonimsky continued, �Our acquisition of the InnoWave business positions us as the largest player and consolidator in both the wideband and broadband markets. The transaction will strengthen our focus on developing regions while increasing our ILEC customer base, expanding our large-product deployment expertise and doubling our installed subscriber base. We are pleased with the pace of the integration process and the promising opportunities that are emerging as a result of the acquisition.�

The Company will hold a teleconference today, May 13, 2003, at 9:00 a.m. EDT to discuss the quarter's results. To participate in the call, please dial (888) 417-2310 (in the U.S.), or (973) 582-2710 (internationally), approximately five minutes prior to the scheduled call start time. The call will also be available live as a Webcast on www.kcsa.com and www.alvarion.com, where it will be archived and available for replay for 30 days. A replay of the call can also be accessed via telephone from 11:00 a.m. EDT on May 13, 2003 through 11:59 p.m. on May 19, 2003 by calling (877) 519-4471 in the Unites States, or (973) 341-3080 internationally, and entering the following access code: 3877750.

About Alvarion

Alvarion is dedicated to delivering seamless wireless broadband networking infrastructure to carriers, ISPs and private network operators, in order to leverage their broadband investments into sustainable profits. Alvarion offers premier wireless broadband solutions for access in the last mile, backhauling connection to the backbone and private network connectivity. Featuring the industry's most extensive range of products and international support, Alvarion is a pioneering leader of the converged wireless broadband network. With over 1.5 million units deployed in 120 countries worldwide, Alvarion provides secure rich-media networks for business or residential Internet access, corporate VPNs, cellular base station feeding, community interconnection, public safety connectivity and extended Hotspots.

For more information, visit Alvarion's World Wide Web site at http://www.alvarion.com/.

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.

Click here to view Alvarion Q1 2003 Financial Reports

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