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 August 2004
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, dated August 4, 2004 3
2
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: August 4, 2004 By: /s/ Dafna Gruber
------------------------------
Name: Dafna Gruber
Title: Chief Financial Officer
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EXHIBIT 1
Contacts
ALVARION ALVARION
Dafna Gruber, CFO 760-517-3187
+972-3-645 6252 Carmen Deville, 760-517-3188
dafna.gruber@alvarion.com carmen.deville@alvarion.com
------------------------- ---------------------------
ALVARION Reports record results FOR THE
second Quarter of 2004
Revenues Up 9% Sequentially and Net Income Increased 74% from First Quarter
Tel - Aviv, Israel, August 4, 2004 - Alvarion Ltd. (NASDAQ: ALVR), the global
leader in wireless broadband solutions, today announced financial results for
the second quarter ended June 30, 2004.
Revenues for the second quarter of 2004 rose to a record $48.8 million, an
increase of 9% compared to $44.7 million in the first quarter of 2004, and up
57% from $31.0 million in the second quarter of 2003. Gross margin increased for
the 11th consecutive quarter, reaching 43.2% compared to 42.6% in the first
quarter of 2004 and 40.1% in the second quarter of 2003.
According to US GAAP, net income increased to $2.5 million or $0.04 per share on
a fully diluted basis for the second quarter of 2004. GAAP net income for the
first quarter of 2004 was $1.4 million, or $0.02 per share on a fully diluted
basis, and GAAP net loss for the second quarter of 2003 was $(5.9) million, or
$(0.11) per share.
4
Results for all periods include expenses attributable to the amortization of
intangible assets and amortization of deferred stock compensation, which totaled
$680,000 in the first and second quarters of 2004, and $790,000 in the second
quarter of 2003. The second quarter of 2003 also included $2.2 million of
acquisition-related expenses in connection with the purchase of certain assets
and liabilities of InnoWave ECI Wireless Systems Ltd. Excluding all
aforementioned amortizations and acquisition related expenses, the Company's
non-GAAP net income for the second quarter of 2004 was $3.2 million, or $0.05
per diluted share. For the first quarter of 2004 non-GAAP net income was $2.1
million, or $0.03 per diluted share, and for the second quarter of 2003 non-GAAP
net loss was $(2.9) million, or $(0.06) per share.
Comments of Management
"During the quarter we met or exceeded all our internal strategic and operating
targets while continuing to lead the BWA market and the WiMAX revolution," said
Zvi Slonimsky, CEO of Alvarion. "Our commitment to leadership in broadband
wireless access has never been more evident. Our performance reinforces our
belief that the combination of our proven technology, breadth of products and
global support enables our continuing growth in this dynamic and competitive
business. We continue to implement our strategies for both internal and external
growth while focusing on excellence and profitability. This quarter was another
quarter of broad-based revenue growth as a result of continued growth in
worldwide demand for wireless broadband solutions and excellent execution in
every respect by the Alvarion team.
"During the quarter, we made progress in all areas of focus," continued Mr.
Slonimsky. "In addition to benefiting from growth in demand, we continued to
expand our customer base and introduce new products. British Telecom completed
its trials of wireless broadband access in four cities around the United Kingdom
and placed an initial order for commercial deployment. We are proud to be
selected by British Telecom, a carrier that recognizes the important
contribution that wireless technology can make in addressing
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the need for broadband services. Their initial order was for our BreezeAccess
VL(TM) solution. Last quarter, we introduced the BreezeAccess VL in 5.4 Ghz
band, and, recently we introduced BreezeAccess VL for the 5.2GHz frequency to
address the growing demand for broadband we see in Russia as well as in a number
of countries in Asia Pacific. The BreezeAccess VL is based on OFDM technology
which provides non-line of sight capabilities, a key WiMAX technology.
"A major new product milestone in Q2 was the introduction of our BreezeMAX(TM)
platform, a WiMAX-ready platform that enables customers to move forward
confidently in anticipation of the availability of WiMAX CPEs. The first product
based on our WiMAX platform was the BreezeMAX 3500, for the 3.5GHz frequency
band. We announced recently that Siemens, our long-term partner, has selected
Alvarion to supply the BreezeMAX 3500 as part of the expansion of our OEM
agreement. We are excited and gratified to see increased interest in WiMAX
solutions from all types of operators, including Tier 1 carriers all over the
world.
"Last week we announced the agreement for the acquisition of interWAVE
Communications International Ltd., a leading supplier of compact cellular
network infrastructure based on GSM and CDMA2000 technology that is particularly
well-suited for rural areas in developing regions. We believe that the
acquisition will complement our existing wireless solutions with a cost
effective fixed and mobile solution to serve the need for voice and data in
regions of the world that need telecommunication infrastructure. We also believe
that this acquisition will broaden our customer base with additional top-tier
operators, and leverage both our strong channel relationships and our global
sales and customer support. We intend to apply our experience in integrating
acquisitions to quickly realize the benefits of operating synergies. In
addition, it is our belief that the interWAVE acquisition provides extremely
valuable core mobile technology and expertise in designing and deploying mobile
networks, which will help us accelerate our portable and mobile WiMAX offering,"
concluded Mr. Slonimsky.
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Q3 2004 Guidance
The Company expects Q3 2004 revenues to range between $51 million and $53
million. At this revenue range, net earnings per share are expected to range
between 5 and 6 cents while non-GAAP net earnings per share, which excludes
amortization of intangible assets and deferred stock-based compensation, is
expected to range between 6 and 7 cents. The third quarter guidance excludes any
impact on operations and any transaction-related charges from the acquisition of
interWAVE Communications International Ltd., which we expect to be closed at or
around the end of the third quarter.
Alvarion's management will host a conference call today, August 4, 2004, at 9:00
a.m. Eastern Time to discuss the quarter's results. To participate in the call,
please dial one of the following numbers approximately five minutes prior to the
scheduled start time: USA: (612) 234-9960; International: +1 612-234-9960.
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 4 p.m. Eastern Time on August 4, 2004 through 11:59 p.m. Eastern
Time on August 11, 2004. 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: 737948.
About Alvarion
With more than 2 million units deployed in 130 countries, Alvarion is the
worldwide leader in wireless broadband providing systems to carriers, ISPs and
private network operators. Leading the WiMAX revolution, Alvarion has the most
extensive deployments and proven product portfolio in the industry covering the
full range of frequency bands. 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, and public safety communications. Alvarion works with several
top OEM providers and over 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 over 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 deploying OFDM-based systems, the company's
prominent work in the WiMAX ForumTM is focused on increasing widespread adoption
of standards-based products in the wireless broadband market.
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 success for new
products, services and technologies; 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,
7
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; we may be unable to retain key personnel of
interWAVE, if interWAVE does not receive required shareholder approvals or
either company fails to satisfy other conditions to closing, the transaction
will not be consummated. Factors affecting interWAVE's business generally
include those set forth in interWAVE's filings with the SEC, including its
Annual Report on Form 10-K for its most recent fiscal year and its most recent
Quarterly Report on Form 10-Q and its Current Reports on Form 8-K.
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.
You may request Alvarion's future press releases or a complete Investor Kit by
contacting Carmen Deville, Investor Relations: carmen.deville@alvarion.com or +1
760-517-3188.
(Tables to Follow)
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ALVARION LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2004 2003
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ASSETS
Cash, cash equivalents, short-term and
long-term investments $167,609 $153,616
Trade receivables 19,709 21,199
Other accounts receivable 8,475 4,499
Inventories 35,626 36,981
Severance pay fund 6,172 5,493
Long-term receivables 732 834
PROPERTY AND EQUIPMENT, NET 11,425 11,939
GOODWILL AND OTHER INTANGIBLE ASSETS 49,058 50,396
-------- --------
TOTAL ASSETS $298,806 $284,957
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 16,100 $ 23,780
Other accounts payable and accrued expenses 39,436 27,959
-------- --------
Total current liabilities 55,536 51,739
LONG TERM LIABILITIES 3,470 5,248
ACCRUED SEVERANCE PAY 8,567 7,768
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TOTAL LIABILITIES 67,573 64,755
SHAREHOLDERS' EQUITY 231,233 220,202
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $298,806 $284,957
======== ========
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ALVARION LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except per share data)
Six Six Three Three Three
Months Months Months Months Months
Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, March 31,
2004 2003 2004 2003 2004
-------- -------- -------- -------- --------
Sales $ 93,451 $ 53,421 $ 48,772 $ 31,008 $ 44,679
Cost of sales 53,364 32,166 27,710 18,583 25,654
-------- -------- -------- -------- --------
Gross profit 40,087 21,255 21,062 12,425 19,025
-------- -------- -------- -------- --------
Operating expenses:
Research and development, net 13,474 11,284 6,860 6,195 6,614
Selling and marketing 18,493 15,308 9,506 8,623 8,987
General and administrative 4,607 2,854 2,367 1,499 2,240
Amortization of intangibles 1,338 1,250 669 650 669
Amortization of deferred
stock compensation 22 280 11 140 11
Acquisition related expenses -- 2,201 -- 2,201 --
-------- -------- -------- -------- --------
Total Operating expenses 37,934 33,177 19,413 19,308 18,521
-------- -------- -------- -------- --------
Operating income (loss) 2,153 (11,922) 1,649 (6,883) 504
Financial income, net 1,782 2,092 850 1,021 932
-------- -------- -------- -------- --------
Net Income (loss) $ 3,935 $ (9,830) $ 2,499 $ (5,862) $ 1,436
-------- -------- -------- -------- --------
Basic earnings (loss) per share $ 0.07 $ (0.19) $ 0.04 $ (0.11) $ 0.03
======== ======== ======== ======== ========
Weighted average number of
shares used in computing
basic earnings (loss) per share 55,839 51,508 56,488 51,487 55,190
======== ======== ======== ======== ========
Diluted earnings (loss) per share $ 0.06 $ (0.19) $ 0.04 $ (0.11) $ 0.02
======== ======== ======== ======== ========
Weighted average number of
shares used in computing
diluted earnings (loss) per share 63,617 51,508 63,651 51,487 62,804
======== ======== ======== ======== ========
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ALVARION LTD.
DISCLOSURE OF NON-US GAAP NET INCOME (LOSS)
U.S. dollars in thousands (except per share data)
Six Six Three Three Three
Months Months Months Months Months
Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, March 31,
2004 2003 2004 2003 2004
--------- --------- -------- -------- --------
Net Income (loss) according
to US GAAP $ 3,935 $ (9,830) $ 2,499 $ (5,862) $ 1,436
Amortization of intangibles 1,338 1,250 669 650 669
Amortization of deferred
stock compensation 22 280 11 140 11
Acquisition related expenses -- 2,201 -- 2,201 --
-------- -------- -------- -------- --------
Net Income (loss), excluding
amortization of intangibles
and deferred stock
compensation and acquisition
related expenses $ 5,295 $ (6,099) $ 3,179 $ (2,871) $ 2,116
======== ======== ======== ======== ========
Basic net earnings (loss) per
share, excluding
amortization of intangibles
and deferred stock
compensation and acquisition
related expenses $ 0.09 $ (0.12) $ 0.06 $ (0.06) $ 0.04
======== ======== ======== ======== ========
Weighted average number of
shares used in computing
basic net earnings (loss)
per share 55,839 51,508 56,488 51,487 55,190
======== ======== ======== ======== ========
Diluted net earnings (loss)
per share, excluding
amortization of intangibles
and deferred stock
compensation and acquisition
related expenses $ 0.08 $ (0.12) $ 0.05 $ (0.06) $ 0.03
======== ======== ======== ======== ========
Weighted average number of
shares used in computing
diluted net earnings (loss)
per share 63,617 51,508 63,651 51,487 62,804
======== ======== ======== ======== ========
11
ALVARION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three
Months
Ended
June
30,2004
-----------
Cash flows from operating activities:
Net Income $ 2,499
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation 992
Amortization of deferred stock compensation 11
Unrealized gain from hedging activities 105
Amortization of intangibles 669
Decrease in trade receivables 3,276
Increase in other accounts receivable and prepaid
expenses (3,034)
Decrease in inventories 2,858
Decrease in trade payables (8,566)
Decrease in Long term receivables 141
Increase in other accounts payables and
accrued expenses 6,859
Accrued severance pay, net 88
---------
Net cash provided by operating activities 5,898
Cash flows from investing activities:
Purchase of fixed assets (705)
---------
Net cash used in investing activities (705)
Cash flows from financing activities:
Proceeds from issuance of shares, net of expenses 1,501
---------
Net cash provided by financing activities 1,501
---------
Increase in cash, cash equivalents, short-term and
long-term investments 6,694
Cash, cash equivalents, short-term and long-term
investments at the beginning of the period 160,915
---------
Cash, cash equivalents, short-term and long-term
investments at the end of the period $ 167,609
=========