Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) will report a $7 million loss due to the bankruptcy of US customer Open Range Communications Inc. Alvarion has not decided whether to include the one-time loss in its financial report for the third quarter or for the fourth quarter.
The loss is due to a $3.6 million inventory write-off on equipment that Alvarion shipped to Open Range, but which was not paid for. An additional $3.4 million loss is for third-party equipment ordered by Open Range, but which had not been delivered at the time of the bankruptcy filing last week.
Alvarion added that the loss would not affect its revenue guidance for the second half of 2011.
In June 2009, Alvarion announced that it would supply Open Range with $100 million worth of 4G WiMAX components for the largest Rural Utilities Service (RUS)-funded deployment in the US.
On Thursday, in response to Open Range's filing for bankruptcy, Alvarion told "Globes", "Open Range's bankruptcy filing will not affect us. Alvarion's business plan for 2011-12 did not include Open Range. We have made no major shipments to it in the past few quarters, and basically prepared to stop working with it in late 2010."
Alvarion's share price fell 1.9% on Nasdaq on Friday to $1.04, giving a market cap of $65 million, and fell 4.2% by early afternoon on the TASE today to NIS 3.65.
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2011
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