Welcome to the major leagues of debt. Collateralized debt obligations, almost always referred to as a CDOs, are horrendously complicated deals that often leave anyone without a MBA wondering what was put into these CDOs.

The first thing to understand about bonds, (aka debt) is that bonds are often backed by something else. Think about your home mortgage. If you don't pay your mortgage, the bank can take the house. You end up homeless, and the bank sells the house to pay off the rest of that mortgage. There is something "backing" that mortgage; something lender can fall back on, if you don't pay your bills like a good human being. That's called collateral.

CDOs are one flavor of an entire sector of investing called structured finance, and they are also backed. CDOs, in the simplest concept, are just bonds backed by something else. In most cases, a CDO is backed by a collection of various types of debt. CDOs can be home mortgages, or other types of debt like credit cards, auto loans, and personal loans. Most of these types of debt are usually considered a bit more risky and they don't have the backing that a home loan does. So, if you think it through, you can imagine that CDOs are usually considered a risky investment.

To take a step further, understand that CDOs have multiple flavors within each CDO. These flavors are called tranches. If you've taken French, you might recognize the word, it means "slice" or "portion." Each slice of that CDO you invest in is a little different and carries different amounts of risk.

You could invest in the lowest risk tranche of the CDO, which would provide you lower risk. But, you don't get a good return on that investment. Or, you can be the heroic adventurer of bonds and invest in the lowest-grade tranche of the CDO. You'll make an amazing return, but if the economy even looks at you wrong, you might lose the entire investment.

CDOs aren¿t easy, and are almost always invested in by mutual funds, insurance companies and hedge funds. As an individual investor, you will probably not come across a CDO you can participate in.

Home / Markets / Industries / Telecom

Wednesday, July 30, 2008

Alvarion(R) Reports Record Revenues for Second Quarter 2008

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Comtex

TEL AVIV, Israel, Jul 30, 2008 (BUSINESS WIRE) ----Alvarion Ltd. (NASDAQ: ALVR), the world's leading provider of WiMAX(TM) and wireless broadband solutions, today announced financial results for the second quarter ended June 30, 2008.

Highlights:

-- Record revenues of $69.7 million, up 21% from Q2 2007;

-- Non-GAAP EPS of $0.03; GAAP loss per share of ($0.01);

-- Cash reserves increased to $149 million;

-- WiMAX revenues of $38 million, up 36% from Q2 2007;

-- Cumulative WiMAX shipments of over $340 million;

In the second quarter of 2008, revenues increased to $69.7 million, a 21% increase from $57.6 million in the second quarter of 2007, and a 4% increase from $67.2 million in the first quarter of 2008. BreezeMAX(R) revenues in Q2 2008 were over $38 million, or about 55% of total revenues.

GAAP net loss in the second quarter of 2008 was ($812,000), or ($0.01) per share, compared to GAAP net income of $136,000, or $0.00 per share, in Q2 of 2007, which included income from discontinued operations of $618,000, and GAAP net loss of $(601,000), or $(0.01) per share, in Q1 2008.

Excluding amortization of acquired intangibles, stock based compensation expenses and discontinued operations, the company reported non-GAAP net profit of $1.7 million, or $0.03 per diluted share, compared with non-GAAP net profit of $2.0 million, or $0.03 per diluted share, in Q2 2007, and in the first quarter of 2008. The sequential decline in net income was primarily the result of unfavorable currency exchange rates.

During Q2 2008, the company generated positive cash flow of approximately $0.9 million. Cash reserves as of June 30, 2008 totaled approximately $149 million, up from about $148 million in the previous quarter.

For supplemental information to facilitate evaluation of the impact of non-cash charges, results of discontinued operations and comparisons with historical results, see the attached table showing the detailed reconciliation of GAAP to non-GAAP results for Q2 and the first six months of 2008 and the comparative periods.

Comments from Management

"We are proud of our continued growth in Q2 as well as the achievement of several strategic milestones," said Tzvika Friedman, president and CEO of Alvarion. "In addition to reporting record revenues and WiMAX shipments, we continued to compete successfully against the major telecom equipment manufacturers and won a large WiMAX project in Latin America. We concluded an important strategic agreement with Nortel Networks, which brings numerous advantages such as R&D support and funding, wider market reach, and extensive planning and rollout capabilities for large deployments. We were one of only four base station vendors to achieve Mobile WiMAX Wave 2 certification from the WiMAX Forum(R), and during Q2 our customer DigitalBridge Communications, launched the first Mobile WiMAX Internet service in the United States over our WiMAX solution."

"On a constant dollar basis, we have also achieved our profitability targets for Q2; however, the significant change in the dollar versus the shekel masks the excellent progress we have made in improving our operating leverage. The dollar has declined approximately 6% from the end of Q1 until the end of Q2, and has declined over 12% since the end of 2007 and we continue to focus on mitigating the unfavorable currency impact to the maximum extent possible.

"Meanwhile, current customers are expanding their networks, bookings are strong, and the pipeline of potential new business is large and growing. This further increases our confidence in our ability to achieve the upper end of our target revenue range of $275 to $300 million for 2008."

Q3 2008 Guidance

The company's revenue guidance for Q3 2008 is $73 to $77 million. Based on this revenue range, non-GAAP per share results are expected to range between $0.02 and $0.06, based on approximately 65.0 million of estimated weighted average diluted shares outstanding. GAAP results are expected to range between a loss of ($0.02) and earnings per share of $0.02.

 Alvarion's
   management will host a conference call today at 9:00 a.m. EDT. Please call the following dial in number to participate: USA:
   (888) 428-4480; International: +1-(612) 332-0637. 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 replay of the call will be available from 11:30 a.m. EDT on July 30, 2008 through 11:59 p.m. EDT on August 30,
   2008. 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: 951932.

 ALVARION LTD. & ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
   OF OPERATIONS U.S. dollars in thousands (except per share data) Three Three Three Six Six Months Months Months Months Months
   Ended Ended Ended Ended Ended June June March June 30, June 30, 30, 30, 31, -------- -------- ------- ------- ------- 2008
   2007 2008 2007 2008 -------- -------- ------- ------- ------- Sales $136,908 $109,623 $69,740 $57,546 $67,168 Cost of sales
   69,934 54,221 35,591 28,420 34,343 -------- -------- ------- ------- ------- Gross profit 66,974 55,402 34,149 29,126 32,825
   -------- -------- ------- ------- ------- Operating expenses: Research and development, net 30,904 24,849 15,791 13,075 15,113
   Selling and marketing 29,559 26,265 14,905 13,621 14,654 General and administrative 9,309 7,700 4,696 3,787 4,613 Amortization
   of intangible assets 1,266 1,272 633 636 633 -------- -------- ------- ------- ------- Total operating expenses 71,038 60,086
   36,025 31,119 35,013 -------- -------- ------- ------- ------- Operating loss (4,064) (4,684) (1,876) (1,993) (2,188) Financial
   income, net 2,651 3,143 1,064 1,511 1,587 -------- -------- ------- ------- ------- Loss from continuing operations (1,413)
   (1,541) (812) (482) (601) -------- -------- ------- ------- ------- Income from discontinued operations, net (*) - 1,054 -
   618 - -------- -------- ------- ------- ------- Net income (loss) $ (1,413)$ (487)$ (812)$ 136 $ (601) -------- -------- -------
   ------- ------- Basic net earnings (loss) per share: Continuing operations $ (0.02)$ (0.02)$ (0.01)$ (0.01)$ (0.01) Discontinued
   operations $ - $ 0.02 $ - $ 0.01 $ - Total $ (0.02)$ (0.01)$ (0.01)$ 0.00 $ (0.01) ======== ======== ======= ======= =======
   Weighted average number of shares used in computing basic net earnings (loss) per share 63,099 61,933 63,140 62,097 63,058
   ======== ======== ======= ======= ======= Diluted net earnings (loss) per share: Continuing operations $ (0.02)$ (0.02)$ (0.01)$
   (0.01)$ (0.01) Discontinued operations $ - $ 0.02 $ - $ 0.01 $ - Total $ (0.02)$ (0.01)$ (0.01)$ 0.00 $ (0.01) ======== ========
   ======= ======= ======= Weighted average number of shares used in computing diluted net earnings (loss) per share 63,099 61,933
   63,140 64,316 63,058 ======== ======== ======= ======= ======= (*) Results of Cellular Mobile Unit that was sold in November
   2006, are classified as discontinued operations and are not included in the results from continuing operations.

   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 AND
   INCOME FROM DISCONTINUED 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 June June June March 30, 30, 30, 30, 31, ------- ------- ------- -------
   ------- 2008 2007 2008 2007 2008 ------- ------- ------- ------- ------- Net income (loss) according to US GAAP $(1,413)$
   (487)$ (812)$ 136 $ (601) Amortization of acquired current technology and customer relationships 1,266 1,272 633 636 633 Stock
   based compensation expenses related to SFAS 123R 3,880 3,555 1,867 1,802 2,013 Income from discontinued operations, net -
   (1,054) - (618) - ------- ------- ------- ------- ------- Net Income from continuing operations excluding amortization of
   acquired intangibles, stock based compensation expenses and income from discontinued operations $ 3,733 $ 3,286 $ 1,688 $
   1,956 $ 2,045 ======= ======= ======= ======= ======= Basic net earnings per share from continuing operations excluding amortization
   of acquired intangibles, stock based compensation expenses and income from discontinued operations $ 0.06 $ 0.05 $ 0.03 $
   0.03 $ 0.03 ======= ======= ======= ======= ======= Weighted average number of shares used in computing basic net earnings
   per share 63,099 61,933 63,140 62,097 63,058 ======= ======= ======= ======= ======= Diluted net earnings per share from continuing
   operations excluding amortization of acquired intangibles, stock based compensation expenses and income from discontinued
   operations $ 0.06 $ 0.05 $ 0.03 $ 0.03 $ 0.03 ======= ======= ======= ======= ======= Weighted average number of shares used
   in computing diluted net earnings per share64,549 64,152 64,565 64,316 64,532 ======= ======= ======= ======= =======

   ALVARION LTD. & ITS SUBSIDIARIES RECONCILIATION BETWEEN GAAP TO NON-GAAP STATEMENT OF INCOME U.S. dollars in thousands
   (except per share data) Three Months Three Ended Months Ended March June 30, 31, 2008 2008 ---------------------------- ------
   Non- Non- GAAP Adjustments GAAP GAAP ------- ----------- ------- ------ Sales $69,740 $ - $69,740 $67,168 Cost of sales 35,591
   (176)(a) 35,415 34,176 ------- -------- ------ ------ Gross profit 34,149 176 34,325 32,992 ------- -------- ------ ------
   Operating expenses: Research and development, net 15,791 (574)(a) 15,217 14,569 Selling and marketing 14,905 (507)(a) 14,398
   14,149 General and administrative 4,696 (610)(a) 4,086 3,816 Amortization of intangible assets 633 (633)(b) - - ------- --------
   ------ ------ Total operating expenses 36,025 (2,324) 33,701 32,534 ------- -------- ------ ------ Operating profit (loss)
   (1,876) 2,500 624 458 Financial income, net 1,064 - 1,064 1,587 ------- -------- ------ ------ Net income (loss) from continuing
   operations (*) (812) 2,500 1,688 2,045 ------- -------- ------ ------ Basic net earnings (loss) per share from continuing
   operation:$ (0.01) 0.03 $ 0.03 ======= ====== ====== Weighted average number of shares used in computing basic net earnings
   (loss) per share 63,140 63,140 63,058 ======= ====== ====== Diluted net earnings (loss) per share from contiuing operation:
   $ (0.01) $ 0.03 $ 0.03 ======= ====== ====== Weighted average number of shares used in computing diluted net earnings (loss)
   per share 63,140 64,565 64,532 ======= ====== ====== (*) Results of Cellular Mobile Unit that was sold in November 2006, are
   classified as discontinued operations and are not included in the results from continuing operations. (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.

 ALVARION LTD. & ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands June 30,
   December 31, 2008 2007 --------- ------------ ASSETS Cash, cash equivalents, short-term and long- term investments $ 149,055
   $ 138,874 Trade receivables 41,300 31,224 Other accounts receivable 9,701 16,250 Inventories 43,471 42,746 Severance pay fund
   13,953 11,667 INVESTMENT IN AFFILIATES 906 605 PROPERTY AND EQUIPMENT, NET 14,572 13,078 GOODWILL AND OTHER INTANGIBLE ASSETS
   57,433 58,699 --------- ------------ TOTAL ASSETS $ 330,391 $ 313,143 --------------------------------------------- =========
   ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade payables $ 40,225 $ 24,091 Other accounts payable
   and accrued expenses 48,316 52,257 --------- ------------ Total current liabilities 88,541 76,348 ---------------------------------------------
   ACCRUED SEVERANCE PAY 19,182 16,242 --------- ------------ TOTAL LIABILITIES 107,723 92,590 ---------------------------------------------
   SHAREHOLDERS' EQUITY 222,668 220,553 --------- ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 330,391 $ 313,143
   --------------------------------------------- ========= ============

 ALVARION LTD.& ITS SUBSIDIARIES Consolidated
   Statement of Cash Flows U.S. dollars in thousands Three Months ended June 30, 2008 ------------- Cash flows from operating
   activities: Net loss $ (812) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 1,414
   Stock based compensation expenses related to SFAS 123R 1,867 Amortization of intangibles assets 633 Increase in trade receivables
   (6,736) Increase in other accounts receivable and prepaid expenses (2,406) Increase in inventories (353) Increase in trade
   payables 11,274 Decrease in other accounts payables and accrued expenses (2,225) Accrued severance pay, net 10 -------------
   Net cash provided by operating activities 2,666 ============= Cash flows from investing activities: Purchase of fixed assets
   (1,897) ------------- Net cash used in investing activities (1,897) ============= Cash flows from financing activities: Proceeds
   from exercise of employees' stock options 171 ------------- Net cash provided by financing activities 171 ============= Increase
   in cash, cash equivalents, short-term and long-term investments 940 ============= Cash, cash equivalents, short-term and long-term
   investments at the beginning of the period 148,115 ------------- Cash, cash equivalents, short-term and long-term investments
   at the end of the period $ 149,055 =============

About Alvarion

Alvarion is the largest WiMAX pure player, ensuring customer long-term success with fixed and mobile solutions for the full range of frequency bands. Based on its OPEN(TM) WiMAX strategy, the company offers superior wireless broadband infrastructure and an all-IP best-of-breed ecosystem in cooperation with its strategic partners. Alvarion boasts over 200 commercial WiMAX deployments worldwide (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: 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 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, the failure of the agreement with Nortel networks limited to generate increased sales as anticipated 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.

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Alvarion uses non-GAAP measures of net income, operating income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123R, amortizations of intangibles and results of discontinued operations. Alvarion's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Alvarion's on-going operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.

You may request Alvarion's future press releases or a complete Investor Kit by contacting Kika Stayerman, kika.stayerman@alvarion.com or +972.3.767.4159.

"WiMAX Forum" is a registered trademark of the WiMAX Forum. "WiMAX," the WiMAX Forum logo, "WiMAX Forum Certified" and the WiMAX Forum Certified logo are trademarks of the WiMAX Forum.

"Alvarion" and "BreezeMAX" are the registered trademarks of Alvarion Ltd.

"OPEN" is the trademark of Alvarion Ltd.

All other companies' names, products, services may be the properties of their respective owners.

SOURCE: Alvarion Ltd.

For 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 or Press: In the U.S.: Heather Mills,
   +1-972-341-2512 hmills@golinharris.com or In the U.K.: Bridget Fishleigh, 44-1273-305-936 bridget@nomadcomms.com

Copyright
   Business Wire 2008 ********************************************************************** As of Saturday, 07-26-2008 23:59,
   the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an UPTREND on 07-21-2008 for ALVR @
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