Alvarion Reports Fourth Quarter and Full Year 2006 Results

TEL AVIV, Israel – February 7, 2007 - Alvarion Ltd. (NASDAQ: ALVR), the leading provider of WiMAX and wireless broadband solutions today announced financial results for the fourth quarter and the year ended December 31, 2006. Results of the Cellular Mobile Unit that was sold in November 2006 are classified under U.S. GAAP as discontinued operations and are not included in the results from continuing operations for 2006 and 2005.

In the fourth quarter 2006, revenues increased to $50.3 million, a 15% increase from $43.7 million in the third quarter of 2006 and a 22% increase from $41.3 million in the fourth quarter of 2005. BreezeMAX revenue in Q4 2006 was $24 million, almost 50% of total revenue, compared to about $17.0 million in Q3.GAAP net loss in Q4 was ($6.2) million, or ($0.10) per share, including discontinued operations. Net loss from continuing operations was ($282,000) or per share, an improvement from the third quarter which showed a loss from continuing operations of ($2.4) million, or ($0.04) per share. Loss from continuing operations in the fourth quarter of 2005 was ($1.8) million, or ($0.03) per share.

Excluding discontinued operations, amortization of acquired intangibles and deferred stock compensation, on a non-GAAP basis, the company reported a net profit of $2.1 million, or $0.03 per diluted share, compared with a non-GAAP net loss of ($39,000), or ($0.00) per share in the third quarter of 2006, and a non-GAAP net loss of ($1.1) million, or ($0. 02) per share in Q4 2005.

The company generated positive cash flow of $9 million during Q4. Cash reserves as of December 31, 2006 totaled $118.4 million, up from $109.4 million in the previous quarter.

For the full year 2006, revenues totaled $181.6 million, an increase of 3% over $176.9 million in 2005. BreezeMAX revenues totaled approximately $72 million, about 40% of total revenue in 2006, compared to approximately $30 million, representing about 15% of total revenue, in 2005.

For 2006, GAAP net loss was ($40.8) million, or ($0.67) per share, including discontinued operations. Net loss from continuing operations was $(4.6) million or ($0.08) per share, compared with a net profit from continuing operations of $4.4 million, or $0.08 per share in 2005. GAAP results for 2006 included for the first time approximately $6.5 million of deferred stock compensation expenses. The net loss from continuing operations is attributable also to increased investments in development, sales and marketing of WiMAX systems during 2006.

Excluding discontinued operations, amortization of acquired intangibles and deferred stock compensation, non-GAAP net income was $4.5 million, or $0.07 per diluted share, compared with non-GAAP net income of $7.2 million, or $0.11 per diluted share in 2005.

For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results, see the attached table showing the detailed reconciliation of GAAP to non-GAAP for Q4 2006 and the full year 2006.

COMMENTS FROM MANAGEMENT

“We had an exemplary quarter and an overall good year,� said Tzvika Friedman, President and CEO of Alvarion. “During 2006, we focused on expanding the breadth of our customer base, and received orders from a variety of incumbents and challengers from around the world. We also succeeded in expanding some trials and smaller scale deployments into larger scale commercial deployments with longstanding customers such as Iberbanda in Spain, Netia in Poland, and Telecom South Africa.

We reached our goal of having nearly 50% of our revenue from WiMAX by the end of the year. We had seven customers that each accounted for over $1 million of revenue in Q4. These customers were from diverse areas such as Spain, Italy, South Africa, Romania, Russia, the Caribbean and several countries in Latin America. Central and Eastern Europe continued to be particularly strong regions. We also expanded our product portfolio in 2006 and are pleased to see bookings from customers in the U.S., Russia and Latin America for our recently launched BreezeMAX 2300, 2500 and 3500 TDD products.

Our goal for 2007 continues to be 15-20% overall growth. A variety of achievements during 2006 have built the foundation for 2007 and beyond. Less visible than successful trials and initial deployments are the partnerships we’ve been building. Some of them, such as Intel, date back several years. Others, such as our joint venture with Accton in Taiwan for mobile WiMAX device development, and our collaboration with Cisco for core network components, are important examples of our new OPEN™ WiMAX strategy. The benefits of best of breed solutions such as scalability, innovation and cost-effectiveness distinguish our approach from the traditional monolithic telco supplier model. We plan to unveil the details of this strategy next week at 3GSM in Barcelona.

During 2006, we also implemented our go-to-market strategy. As the market expands to include new segments and applications, our channel strategy must evolve as well. We have been continuing to cooperate with traditional OEM partners for certain products, while cultivating broad relationships with premier companies such as IBM, an important new member of the WiMAX Forum. We have been developing deep ties with strong local partners in key geographies, and expanding our already extensive network of distributors both geographically and within key vertical markets. We have numerous projects and deals pending, via relationships we fostered throughout the year. We believe the importance of these new partners and others will become more visible over the next year or two.�

Q1 2007 Guidance

The company’s revenue guidance for Q1 2007 is $49 million to $53 million. Non- GAAP per share results are expected to range between $0.01 and $0.04. GAAP per share results are expected to range between ($0.02) and $0.01.

Alvarion’s management will host a conference call today, February 7, at 9:00 a.m. Eastern time to discuss the quarter. To participate in the call, please dial one of the following numbers approximately five minutes prior to the scheduled start time: USA: (612) 332-0932, International: +1 (612) 332-0932.

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 11:45 a.m. ET on February 7, 2007 through 11:59 p.m. ET on February 14, 2007. 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: 857787.

About Alvarion
With more than 2 million units deployed in 150 countries, Alvarion (www.alvarion.com) is the world’s leading provider of innovative wireless network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP, video and other services.

With the most widely deployed WiMAX system in the world, Alvarion is leading the market to Open WiMAX solutions with a proven product portfolio covering the full range of frequency bands with both fixed and mobile solutions. 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, public safety communications, and mobile voice and data. Alvarion works with multiple global OEM providers and more than 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 in deploying OFDM-based systems, the Company's prominent work in the WiMAX Forumâ„¢ is focused on increasing the widespread adoption of standards-based products in the wireless broadband market and leading the entire industry to Open WiMAX solutions.

As a wireless broadband pioneer, Alvarion has been driving and delivering innovations for more than 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 in deploying OFDM-based systems, the Company's prominent work in the WiMAX Forum™ is focused on increasing the widespread adoption of standards-based products in the wireless broadband market and leading the entire industry to mobile WiMAX solutions. For more information, visit Alvarion’s World Wide Web site at www.alvarion.com

Source: Alvarion