Press Releases

Alvarion Reports Fourth Quarter and Full Year 2002 Results

Tel – Aviv, Israel, February 4, 2003 – Alvarion Ltd. (NASDAQ: ALVR), a leading provider of Wireless Broadband solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2002.

Results of the Fourth Quarter

Revenues for the fourth quarter of 2002 were $22.3 million, an increase of 4% compared with $21.6 million for the third quarter of 2002. Revenues for the fourth quarter of 2001 were $25.2 million. Net loss for the fourth quarter of 2002 was $(5.4) million, or $(0.10) per share, including restructuring costs of $1.1 million. This compares to a net loss for the third quarter of 2002 of $(4.8) million, or $(0.09) per share, and $(16.6) million, or $(0.30) per share, for the fourth quarter of 2001.

The results of the fourth quarter of 2002 included amortization of current technology and deferred stock compensation totaling $740,000, and restructuring costs totaling $1.1 million. Excluding these amounts, the Company’s pro-forma net loss for the quarter was $(3.5) million, or $(0.07) per share. This compares with a pro-forma net loss of $(4.0) million, or $(0.07) per share, in the third quarter of 2002, and a pro-forma net loss of $(5.6) million, or $(0.10) per share in the fourth quarter of 2001.

Results of the Full Year

Revenues for the year 2002 were $88.8M, compared with revenues of $99.0 million in 2001. Net loss for 2002 was $(20.7) million, or $(0.38) per share, compared with $(110.0) million, or $(2.80) per share for 2001. The results of 2002 included amortization of current technology and deferred stock compensation totaling $3.0 million, and restructuring costs totaling $1.1 million. Excluding these amounts, the Company’s pro-forma net loss for 2002 was $(16.6) million, or $(0.31) per share, compared with a pro-forma loss of $(9.6) million, or ($0.24) per share for the twelve months ended December 31, 2001.

Cash reserves as of December 31, 2002 were $162.7 million, compared with $170.0 million as of September 30, 2002. During the fourth quarter, $3.4 million was used for operational activities, and $3.9 million was invested in the repurchase of 1.9 million of the Company’s outstanding shares. From the initiation of the Company’s share buyback plan in the first quarter of 2002 until the date of this earnings release, a total of 3.5 million shares have been purchased at a total consideration of $7.2 million.

Comments of Management

Commenting on the fourth quarter, Zvi Slonimsky, CEO of Alvarion, said, “We are pleased to report revenue growth and improved margins for the fourth quarter of 2002, representing a solid end to a difficult year. During the fourth quarter, our revenues were higher than they were in the second and third quarters, reflecting the sale of thousands of Alvarion units to a wide variety of operators and service providers. At the same time, the continued success of our efficiency program enabled us to meet our targets, delivering another quarter of improved gross margins, decreased operating expenses, and reduced cash burn.

“Despite tough market conditions, 2002 was a watershed year for Alvarion during which we positioned Alvarion as the clear leader of the Broadband Wireless market. Our installation of over 600,000 Alvarion units underscored the performance gap between us and the rest of the industry. Our strategy of targeting two high-potential market segments helped us add hundreds of new operators to our user base during the year. Over 30 different cellular operators, including Entel, Moscow Cellular, CamGSM, Connex, Telecel, and numerous others, have now installed complementary Alvarion broadband access and backhaul networks. In parallel, a growing number of independent telcos and ISPs in rural America have launched cost-effective access networks based on our superior technologies for the unlicensed bands.”

Mr. Slonimsky continued, “During 2002, we launched many new products and technology extensions. For Wireless DSL (WDSL) applications, we introduced the high-speed BreezeACCESS OFDM™ and a new line of 5GHz products. For Multi-Service applications, we enhanced the Alvarix™ solution for the 28GHz bands. We introduced our high-performance DS.5800 product as the first in a series of robust backhauling solutions. And we are excited about our unique SU-M (mobile CPE) Homeland Security mobile networking solution for municipalities and public safety organizations.”

Mr. Slonimsky concluded, “The development of such a wide variety of technologies and products reinforces our position as the industry’s leader and its ‘One-Stop Wireless Broadband Shop’ – a technology powerhouse with solutions for the full range of operators and end-users throughout the world. This approach has enabled us to maintain strong revenues and positioned us to accelerate our momentum. As we move into 2003, we believe our sound strategies will enable us to strengthen our competitive positioning, expand our sales, and address emerging opportunities in adjacent markets.”

The Company will hold a teleconference today, February 4, 2003, at 9:00 a.m. EST 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. EST on February 4, 2003 through 11:59 p.m. on February 10, 2003 by calling (877) 519-4471 in the Unites States, or (973) 341-3080 internationally, and entering the following access code: 3714317.

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.

You may register to receive Alvarion’s future press releases or to download a complete Digital Investor Kit™ including press releases, regulatory filings and corporate materials by clicking on the “Digital Investor Kit™” icon at www.kcsa.com.

Click here to view Alvarion Q4 2002 Financial Reports

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