GAAP loss of ($0.09) per share compared to GAAP EPS from continuing operations of $0.11 in 2007
In the fourth quarter of 2008, revenues were $70.1 million, a decrease of 6% from $74.3 million in the third quarter of 2008, and increase of 6% from $66.3 million in the fourth quarter of 2007.
GAAP net loss in the fourth quarter of 2008 was ($4.8) million, or ($0.08) per share, which included a restructuring charge and related expenses of $3.4 million in connection with the cost reduction initiatives that were implemented in December 2008, compared to net income of $803,000, or $0.01 per share in Q3.
Excluding the amortization of intangibles and stock based compensation expenses, other income, restructuring charge and related expenses, and the results of discontinued operations, on a non-GAAP basis, the company reported net income in the fourth quarter of 2008 of approximately $119,000, or $0.00 per diluted share, compared with non-GAAP net income of approximately $3.0 million, or $0.05 per diluted share in the third quarter of 2008, and non-GAAP net income of approximately $3.1 million, or $0.05 per diluted share in Q4 2007.
The sequential decline in revenues was primarily a result of Alvarion’s inability to recognize $2.4 million of revenues from the sale of products to Nortel Networks during the fourth quarter of 2008 after Nortel filed for bankruptcy protection on January 14, 2009 and subsequently repudiated the joint WiMAX agreement between the two companies. The decline in Q4 gross margin was due to the write-off of the cost of the equipment related to the Nortel sales in the period.
For the full year 2008, revenues totaled a record $281.3 million, an increase of 19% over $236.6 million in 2007. WiMAX revenues set a new record of approximately $171 million, about 61% of total revenues in 2008, compared with approximately $124 million, representing about 52% of total revenues, in 2007. WiMAX shipments for the year reached a new record of approximately $189 million.
For 2008, net loss was ($5.5) million, or ($0.09) per share compared with net income from continuing operations of $7.1 million, or $0.11 per share in 2007.
Excluding the amortization of intangibles and stock based compensation expenses, other income and restructuring charge and related expenses and the results of the discontinued operations, non-GAAP net income for 2008 was $6.9 million, or $0.11 per diluted share, compared with non-GAAP net income of $8.8 million, or $0.14 per diluted share in 2007.
As anticipated, gross margin in 2008 declined primarily due to a shift in product mix. In addition, unfavorable foreign currency translation during the first three quarters contributed to the margin decline.
Cash reserves as of December 31, 2008, totaled approximately $141 million, after using $5 million to repurchase Alvarion shares during the fourth quarter.
For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results of operations, see the attached table showing the detailed reconciliation of GAAP to non-GAAP results for Q4 2008, the full year 2008 and the comparative periods.
Alvarion Technologies Ltd. (Nasdaq: ALVR)