Tuesday, May 4, 2010

WiMAX Vendor Alvarion Cutting Staff Headcount by 20%

Israeli WiMAX vendor, Alvarion has reported a 13.8% decline in its first-quarter revenues and a widened net loss of $4.9 million. Revenues came in at $51.9 million, while shipments declined by 5.9% to US$47.9 million.

"Q1 results were within the range of our guidance and, as expected, reflect continued delays in several business catalysts," said Eran Gorev, President and CEO of Alvarion. "Meanwhile, we continued the expansion of our business with several existing customers and made important progress toward securing several major projects in Asia Pacific, EMEA and North America. The timing of actual orders is difficult to anticipate, but we hope to see some impact from these developments in 2010. We are using the delay in the business catalysts to strengthen our capabilities in order to capture a larger share of the projects once the vendor selection processes move forward."

The net loss of US$4.9 million compared to a net loss of US$1.3 million in Q4 2009, and US$0.8 million a year ago.

As expected, the company has announced substantial job cuts amounting to 20% of the workforce, or around 170 people, which will be completed during Q2, resulting in a restructuring charge during the quarter.

"After a thorough business review, we are moving decisively to implement a two-stage plan, continued Mr. Gorev. "First, we are transforming the organization, including our cost structure, into one that will best serve our near-term strategic business objectives. These changes will allow us to more effectively focus on the right opportunities, deliver end-to-end network solutions including professional services, and, in turn, capture a larger proportion of the total project dollars than we have in the past.

"The second stage of our plan will focus on positioning Alvarion for profitable growth in the increasingly complex multi-technology environment that will evolve over the next couple of years. We intend to complete the process and begin to implement the next phase of our plan during the second half of the year."

Q2 2010 Guidance

The company indicated that there may be another sequential decline in revenues in Q2, and it has decided not to give detailed guidance, primarily because the timing of revenue from several large projects cannot be predicted with accuracy. Management continues to expect gradual improvement to begin during the second half of the year.

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