Alvarion Ltd. Q1 2010 Earnings Call Transcript

Alvarion Ltd. Q1 2010 Earnings Call Transcript
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Alvarion Ltd. (ALVR)

Q1 2010 Earnings Call

May 4, 2010 9:00 am ET

Presentation

Operator

Executives

Karen Shemesh

Eran Gorev - President and CEO

Efrat Makov - CFO

Analysts

Jonathan Goldberg - Deutsche Bank

Ittai Kidron - Oppenheimer

Mike Walkley - Piper Jaffray

Scott Searle - Merriman Curhan Ford & Company

Daniel Meron - RBC Capital Markets

Larry Harris - C.L. King

Steve Ferranti - Stephens Incorporated

Gunther Carter - Discovery Group

Ari Bensinger - Standard & Poor's

Presentation

Operator

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Ladies and gentlemen thank you very much for standing by and welcome to the Alvarion Q1 2010 earnings release conference call. At this time all participants are in a listen only mode. Later we will conduction a Question and Answer session. Instructions will be given to you at that time. (Operator Instructions)

I would now like to turn the conference over to Karen Shemesh.

Karen Shemesh

On the line with me today are Eran Gorev, President and CEO and Efrat Makov – CFO.

The earnings release was issued this morning. It is now available on all major news feeds May I just stress that this conference call may contain forward-looking statements within the meaning of the Safe Harbor Provision and the Private Securities Litigation Reform Act. 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 global economic crisis; the failure of the market for WiMAX products to develop as anticipated; 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 on our sales, services, provisioning, 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 advertising, marketing and technology providers; and other risks detailed from time to time in the company's 20-F Annual Report risk factors sections, as well as other filings with the Securities and Exchange Commission.

For purpose of discussing comparisons to prior period, in this call we will refer to non-GAAP numbers that excludes the impacts of stock-based compensation expenses, one-time charges such as restructuring cost and the amortization of intangibles. For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results please refer to our earnings release and to detailed reconciliation tables of GAAP to non-GAAP results for Q1 2010 and the comparative period which also appear on the company's website and attached the press release on major news feeds.

I would now like to turn the call over to our President and CEO, Eran Gorev.

Eran Gorev

Good morning everyone and thanks for joining us this morning. We have quite a bit to cover today so, I’ll try to get right to it.

The numbers for Q1 I’m sure you’ve all seen in the earnings release from earlier today. We will obviously talk a little bit more about that. Efrat will cover some of it and [inaudible] my thoughts on those. But when we take a broader perspective on Q1 and to put it in context certainly our results or performance in Q1 was affected by a number of macro factors. We can look at the United States where continued delay and some other items which I’ll briefly touch on in terms of the broadband stimulus funds and the program has led or has had an impact on our business in that region.

And some other regions where Alvarion benefits from our enterprise business, the non-carrier space where we sell some of our solutions to municipalities. So, one example I can mention in Poland there were some additional delay in fund allocation to such projects and that in turn had an impact on our business.

India, which is always very relevant and very important for our business and the discussion and so we all know there was again a delay in the spectrum option in India. Certainly at the end of the quarter in March the good news is that they started moving forward the Indian government with the 3G option and I’ll touch on that a little bit later on in the call. But in terms of Q1 business and looking at Q2 the delay has had an impact on Alvarion’s business.

And also and it’s important not to forget that in spite of some improvement in a number of countries there are certain regions or countries where the credit environment is still challenging. I mentioned the US broadband stimulus and the program itself. Let me share with you a little bit of additional information on that front.

At the end of Q1 if we move just in terms of dates. On March 31 at that point in time when round one of the program was not yet 100% complete although it seemed as if it was, none of the customers and frankly very few wireless broadband operators had received any information in terms of them receiving grants. In fact both NTIA and RUS, the two departments, the two entities that are tasked with driving these programs, these stimulus programs, have announced that they will move quite a bit of funding from round one that will roll over to round two which means it’s not gone but round one certainly was not highlighted by allocation of grants to wireless broadband in general.

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