Alvarion® Reports Q4 and Full Year 2009 Results

Alvarion Ltd. (NASDAQ:ALVR), the world''s leading provider of 4G WiMAX™ and wireless broadband solutions, today announced financial results for the fourth quarter and year ended December, 31, 2009.

Q4 Highlights:

GAAP operating loss of ($1.3) million; non-GAAP operating profit of $0.6 million
GAAP net loss of ($0.02) per share; non-GAAP net income of $0.01 per share
WiMAX revenues up 5% sequentially to $42.7 million
WiMAX shipments down 9% sequentially to $34.2 million

2009 Highlights (compared to 2008):

Reduced GAAP operating expenses by 16%; reduced non-GAAP operating expenses by 14%
GAAP operating loss of ($8.0) million; non-GAAP operating loss of ($0.6) million
GAAP net loss of ($0.12) per share; non-GAAP net income of $0.01 per share
WiMAX revenues up 5% to $179 million
WiMAX shipments down 20% to $152 million

In the fourth quarter of 2009, total revenues were $60.2 million, an increase of 3.1% from $58.4 million in the third quarter of 2009, and a decrease of 14% from $70.1 million in the fourth quarter of 2008.

GAAP net loss in the fourth quarter of 2009 was ($1.3) million, or ($0.02) per share, compared to a net loss of ($1.0) million, or ($0.02) per share in Q3 2009. GAAP net loss in the fourth quarter of 2008 was ($4.8) million, or ($0.08) per share.

Excluding the amortization of intangibles, stock based compensation, restructuring and other charges, net, on a non-GAAP basis, the company reported net income of $0.7 million in the fourth quarter of 2009, or $0.01 per diluted share, compared with non-GAAP net income of $0.2 million, or $0.00 per diluted share in the third quarter of 2009, and non-GAAP net loss of ($0.4) million, or ($0.01) per diluted share in the fourth quarter of 2008.

Please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP for the fourth quarter of 2009 and the comparative periods.

Cash used in operations was ($5.8) million. As of December 31, 2009, cash, cash equivalents and investments totaled $118 million.

Comments from Management

"We are pleased with the increase in WiMAX revenues in 2009 and our ability to deliver a non-GAAP profit in the face of business challenges arising from the worst global economic crisis in a generation," said Eran Gorev, president and CEO of Alvarion. "Throughout the year, operators'' interest in deploying WiMAX networks remained robust and the WiMAX ecosystem continued to expand.

"Several important business catalysts expected in Q4, such as the awarding of broadband stimulus funds in the U.S. and the auction of WiMAX spectrum in India, have been delayed and are now expected to materialize during 2010.

"By Q4, there were over 120 WiMAX Forum-certified subscriber devices available. As additional devices are introduced, more spectrum is allocated, new vertical market applications are launched and additional funds are made available to help conquer the digital divide, we believe the future of WiMAX is bright.

"During 2009, we acted decisively to streamline the organization, improve efficiency and lower our breakeven point to position the company to deliver operating leverage as revenues improve. As a result, we achieved a non-GAAP operating profit in Q4.

"Looking ahead, we expect gradual improvement during the second half of 2010 as the tight credit environment starts to ease and some of the business catalysts materialize."

Q1 2010 Guidance

The company''s revenue guidance for Q1 2010 is $50 to $60 million. Based on the indicated revenue range, non-GAAP per share results are expected to range between a loss of ($0.07) and profit of $0.01. GAAP per share results are expected to range between a loss of ($0.10) and ($0.02).

Alvarion management will host a conference call today, February 3, at 9:00 a.m. Eastern time to discuss the quarter.

Please call the following dial in number to participate:
USA: (800) 230-1096; International: +1(612) 332-0107.

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 online broadcast will be available on the website.

A replayof the call will be available from 11:00 a.m. EST on February 3, 2010 through 11:59 a.m. EST on March 3, 2010.

To access the replay, please call:
USA: (800) 475-6701
International: +1(320) 365-3844.
To access the replay, users will need to enter the following code: 140419.

Alvarionhas scheduled dates for the earnings announcements during 2010 and this schedule is available on the website at http://www.alvarion.com/index.php/en/investors.

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ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
	�	�	�			�			�			�			�
											Three			Three			Three
					Year Ended			Year Ended			Months Ended			Months Ended			Months Ended
					December 31,	�	�	December 31,	�	�	December 31,	�	�	December 31,	�		September 30,
					2009			2008			2009			2008			2009
																	�
Sales				$	245,239		$	281,281		$	60,241		$	70,094		$	58,383
																	�
Cost of sales					132,454			147,783			32,202			38,751			30,925
					�			�			�			�			�
Gross profit					112,785			133,498			28,039			31,343			27,458
																	�
Operating expenses:
Research and development, net					50,790			59,679			10,790			14,646			12,330
Selling and marketing					52,022			60,521			12,857			14,909			12,824
General and administrative					15,087			18,813			3,584			4,773			3,757
Amortization of intangible assets					132			1,327			33			(267)			33
Restructuring and other related expenses (*)					2,787			2,914			2,119			2,914			-
																	�
					�			�			�			�			�
Total Operating expenses					120,818			143,254			29,383			36,975			28,944
					�			�			�			�
Operating loss					(8,033)			(9,756)			(1,344)			(5,632)			(1,486)
																	�
Other loss					(823)			-			(74)			-			-
																	�
Financial income, net					1,668			4,297			117			783			454
					�			�			�			�			�
Net income (loss)					(7,188)			(5,459)			(1,301)			(4,849)			(1,032)
																	�
																	�
																	�
Basic net earnings (loss) per share:					(0.12)		$	(0.09)		$	(0.02)		$	(0.08)			(0.02)
																	�
Weighted average number of shares used in computing basic net earnings (loss) per share				$	62,023			62,925			62,095			62,330		$	62,054
																	�
Diluted net earnings (loss) per share:					(0.12)		$	(0.09)		$	(0.02)		$	(0.08)			(0.02)
																	�
																	�
Weighted average number of shares used in computing diluted net earnings (loss) per share				$	62,023			62,925			62,095			62,330		$	62,054
																	�

	�	�	�			�				�		�
ALVARION LTD. & ITS SUBSIDIARIES
RECONCILIATION BETWEEN GAAP TO NON-GAAP STATEMENT OF INCOME
U.S. dollars in thousands (except per share data)
														�
														Three
					Three Months Ended									Months Ended
					December 31,									September 30,
					2009									2009
					GAAP			Adjustments		�	Non-GAAP			Non-GAAP
														�
Sales				$	60,241		$	-			60,241		$	58,383
														�
Cost of sales					32,202			32	(a)		32,234			30,832
					�			�			�			�
Gross profit					28,039			(32)			28,007			27,551
														�
Operating expenses:
Research and development, net					10,790			(10)	(a)		10,780			11,837
Selling and marketing					12,857			109	(a)		12,966			12,467
General and administrative					3,584			70	(a)		3,654			3,523
Amortization of intangible assets					33			(33)	(b)		-			-
Restructuring and other related expenses					2,119			(2,119)	(c)		-			-
														�
					�			�			�			�
Total Operating expenses					29,383			(1,983)			27,400			27,827
					�			�			�			�
Operating profit (loss)					(1,344)			1,951			607			(276)
														�
Other loss					(74)			74.00			0
														�
Financial income, net					117			-			117			454
					�			�			�			�
Net income (loss)					(1,301)			2,025			724		$	178
														�
														�
Basic net earnings (loss) per share					(0.02)						0.01			0.00
														�
Weighted average number of shares used in computing basic net earnings (loss) per share				$	62,095						62,095			62,054
														�
Diluted net earnings (loss) per share					(0.02)						0.01			0.00
														�
Weighted average number of shares used in computing diluted net earnings (loss) per share				$	62,095						64,515			64,605
														�

(a)	�	The effect of stock-based compensation. The Company adopted the provisions of Statement of Financial Accounting Standards No. 123(R), "Share-Based Payment" on January 1, 2006 using the modified-prospective transition method.
		�
(b)		The effect of amortization of intangible assets.
		�
(c)		Results of the organizational change and other charges.

	�	�	�			�			�			�			�
ALVARION LTD. & ITS SUBSIDIARIES
																	�
DISCLOSURE OF NON-US GAAP NET INCOME
																	�
FOR COMPARATIVE PURPOSES NET INCOME AND EARNINGS PER SHARE FROM CONTINUING OPERATIONS EXCLUDING AMORTIZATION OF ACQUIRED INTANGIBLES, STOCK BASED COMPENSATION EXPENSES, RESTRUCTURING EXPENSES AND ONE TIME CHARGES
																	�
U.S. dollars in thousands (except per share data)
																	�
											Three			Three			Three
					Year Ended			Year Ended			Months Ended			Months Ended			Months Ended
					December 31,			December 31,			December 31,			December 31,			September 30,
					2009			2008			2009			2008			2009
																	�
Net income (loss) according to US GAAP				$	(7,188)		$	(5,459)		$	(1,301)		$	(4,849)		$	(1,032)
																	�
Amortization of acquired intangibles					132			1,327			33			(267)			33
																	�
Stock based compensation expenses related to SFAS 123R					4,246			7,561			(201)			1,789			1,177
																	�
Restructuring and other related expenses (*)					2,787			2,914			2,119			2,914			-
																	�
Other loss					823						74						-
																	�
Net Income (loss) excluding amortization of acquired intangibles, stock based compensation and restructuring expenses				$	800		$	6,343		$	724		$	(413)		$	178
																	�
Basic net earnings (loss) per share excluding amortization of acquired intangibles, stock based compensation and restructuring expenses				$	0.01		$	0.10		$	0.01		$	(0.01)		$	0.00
																	�
Weighted average number of shares used in computing basic net earnings (loss) per share					62,023			62,925			62,095			62,330			62,054
																	�
Diluted net earnings (loss) per share excluding amortization of acquired intangibles, stock based compensation and restructuring expenses				$	0.01		$	0.10		$	0.01		$	(0.01)		$	0.00
																	�
Weighted average number of shares used in computing diluted net earnings (loss) per share					64,184			64,143			64,515			62,330			64,605
																	�

(*)

�

Results of the organizational change and other charges.

	�	�			�
ALVARION LTD. & ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
							�
				December 31,			December 31,
				2009			2008
ASSETS
							�
Cash, cash equivalents, short-term and long-term investments			$	118,474		$	140,630
Trade receivables				65,490			59,814
Other accounts receivable				7,241			8,110
Inventories				35,982			53,675
							�
INVESTMENT IN AFFILIATES				-			1,554
							�
PROPERTY AND EQUIPMENT, NET				16,610			16,955
							�
GOODWILL AND OTHER INTANGIBLE ASSETS				57,240			57,372
							�
TOTAL ASSETS			$	301,037		$	338,110
							�
							�
							�
							�
LIABILITIES AND SHAREHOLDERS'' EQUITY
							�
CURRENT LIABILITIES
							�
Trade payables			$	35,581		$	57,033
Other accounts payable and accrued expenses				42,203			57,111
							�
Total current liabilities				77,784			114,144
							�
LONG TERM LIABILITIES
Long term employees liabilities				4,354			5,831
Long term liabilities others				2,255			2,229
							�
Total long term liabilities				6,609			8,060
							�
TOTAL LIABILITIES				84,393			122,204
							�
SHAREHOLDERS'' EQUITY				216,644			215,906
							�
TOTALLIABILITIES AND SHAREHOLDERS'' EQUITY			$	301,037		$	338,110
							�

	�	�	�
ALVARION LTD.& ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
U.S. dollars in thousands
					�
					Three
					Months ended
					December 31, 2009
					�
Cash flows from operating activities:
Net loss				$	(1,301)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation					1,699
Capital (Gain)/Loss					267
Stock based compensation expenses related to SFAS 123R					(201)
Amortization of intangibles assets					33
Increase in trade receivables					(12,160)
Decrease in other accounts receivable and prepaid expenses					2,292
Decrease in inventories					4,171
Decrease in trade payables					(139)
Decrease in other accounts payables and accrued expenses					(409)
Decrease in long term employees liabilities					(12)
Decrease in long term liabilities					(50)
Net cash used in operating activities					(5,810)
					�
					�
Cash flows from investing activities:
Purchase of fixed assets					(1,164)
Net cash used in investing activities					(1,164)
					�
Cash flows from financing activities:
Proceeds from exercise of employees'' stock options					154
Net cash provided by financing activities					154
					�
Decrease in cash, cash equivalents, short-term and long-term investments					(6,820)
					�
Cash, cash equivalents, short-term and long-term investments at the beginning of the period					125,294
Cash, cash equivalents, short-term and long-term investments at the end of the period				$	118,474

About Alvarion

Alvarion (NASDAQ:ALVR) is a global leader in 4G wireless communications with the industry''s most extensive customer base with hundreds of commercial WiMAX deployments. Alvarion''s industry leading solutions enable true open 4G and vertical applications for service providers and enterprises. Through an OPEN WiMAX strategy, superior IP and OFDMA know-how, and ability to deploy large scale end-to-end turnkey networks, Alvarion is delivering the true 4G broadband experience today (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: potential impact on our business of the current global recession, the inability of our customers to obtain credit to purchase our products as a result of global credit market conditions, the failure to fund projects under the U.S. broadband stimulus program, continued delays in WiMAX license allocation in certain countries; the failure of the market for WIMAX products to develop as anticipated; potential impact on our business of the current global recession;, Alvarion''s inability to capture market share in the expected growth of the WIMAX market as anticipated, due to, among other things, competitive reasons or failure to execute in our sales, marketing or manufacturing objectives; 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 the Company''s 20-F Annual Report Risk Factors section as well as in other filings with the Securities and Exchange Commission.

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 Kika Stayerman at kika.stayerman@alvarion.com or +972.3.767.4159.

"WiMAX" is a trademark of the WiMAX Forum.
"Alvarion" is a registered trademark of Alvarion Ltd. in certain jurisdictions.
All other companies'' names, products, services may be the properties of their respective owners.

Contacts:

Alvarion Ltd.
Investor:
Efrat Makov, CFO
+972.3.645.6252
+1.650.314.2652
efrat.makov@alvarion.com
or
Claudia Gatlin, +1.212.830.9080
claudia.gatlin@alvarion.com