LITTLE FALLS, New Jersey,
Nov. 14, 2016 /PRNewswire/ -- Ceragon
Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist,
today reported results for the third quarter which ended
September 30, 2016.
Third Quarter 2016 Highlights:
Revenues - $79.1
million, down 7% from the third quarter of 2015, and up 13%
from the second quarter of 2016.
Gross margin - 32.9%, compared to 31.9% in the third
quarter of 2015, and compared to 34.7% in the second quarter of
2016.
Operating income - $5.8
million, compared to $6.2
million in the third quarter of 2015, and $4.0 million in the second quarter of 2016.
Net income - Net income of $3.5 million or $0.04 per diluted share for the third quarter of
2016. Net income for the third quarter of 2015 was $1.4 million or $0.02 per diluted share. Net income for the
second quarter of 2016 was $0.1
million or $0.00 per diluted
share.
Non-GAAP results - Gross margin was 33.8%, operating
income was $6.9 million, and net
income was $4.8 million, or
$0.06 per diluted share. For
reconciliation of GAAP to non-GAAP results, see attached
tables.
Cash and cash equivalents - $32.4
million at September 30, 2016
compared to $34.4 million at
June 30, 2016.
"We continue to reap the benefits of our strategic focus on
delivering the most value to best-of-breed oriented customers,"
said Ira Palti, president and CEO of
Ceragon. "In Q3, we reported the highest net income in many
quarters. We are targeting significant improvement in our net
income in 2016, and further improvement in 2017 as well."
Supplemental geographical breakdown of revenue for the third
quarter of 2016:
- Europe: 13%
- Africa: 8%
- North America: 10%
- Latin America: 30%
- India: 31%
- APAC: 8%
A conference call to discuss the results will begin at
9:00 a.m. EDT on November 14, 2016. Investors are invited to join
the Company's teleconference by calling USA: (800) 230-1059 or International: +1 (612)
234-9959, from 8:50 a.m. EDT. The
call-in lines will be available on a first-come, first-serve
basis.
Investors can also listen to the call live via the Internet by
accessing Ceragon Networks' website at the investors' page:
http://www.ceragon.com/about-us/ceragon/investor-relations,
selecting the webcast link, and following the registration
instructions.
If you are unable to join us live, the replay numbers are:
USA: (800) 475-6701 or
International +1 (320) 365-3844 Access Code: 403910. A replay of
both the call and the webcast will be available through
December 15, 2016.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless backhaul
specialist. We help operators and other service providers worldwide
increase operational efficiency and enhance end customers' quality
of experience with innovative wireless backhaul solutions. Our
customers include wireless service providers, public safety
organizations, government agencies and utility companies, which use
our solutions to deliver 4G, mission-critical multimedia services
and other applications at high reliability and speed. Ceragon's
unique multicore technology provides highly reliable, high-capacity
4G wireless backhaul with minimal use of spectrum, power and other
resources. This technology enables increased productivity, as well
as simple and quick network modernization. We deliver a range of
professional services that ensure efficient network rollout and
optimization to achieve the highest value for our customers. Our
solutions are deployed by more than 460 service providers, as well
as hundreds of private network owners, in more than 130
countries.
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Ceragon Networks® and FibeAir® are registered trademarks of
Ceragon Networks Ltd. in the United
States and other countries. CERAGON ® is a trademark of
Ceragon Networks Ltd., registered in various countries. Other names
mentioned are owned by their respective holders.
This press release contains statements concerning Ceragon's
future prospects that are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on the current beliefs,
expectations and assumptions of Ceragon's management. Examples of
forward-looking statements include: revenues, growth prospects,
projections of gross margins, operating and other expenses, capital
expenditures, profitability and liquidity, competitive
pressures, product development, financial resources, cost
savings and other financial matters. You may identify these and
other forward-looking statements by the use of words such as "may"
"plans" "anticipates" "believes" "estimates" "targets" "expects"
"intends" "potential" or the negative of such terms, or other
comparable terminology. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including the risk that Ceragon's expectations
regarding future revenues and profitability will not materialize;
risks relating to the concentration of our business in India, Latin
America, Africa and in
developing nations in other regions, including political, economic
and regulatory risks from doing business in those regions and
nations, including in relation to local business practices
that may be inconsistent with international regulatory
requirements, such as anti-corruption and anti-bribery regulations
, currency export control issues and recent economic concerns; the
risk that the business coming from our bigger customers will go
down significantly or cease, the risk that Ceragon will not achieve
the benefits it expects from its expense reduction plans and profit
enhancement programs, as may be implemented from time to time; the
risk of significant expenses in connection with potential
contingent tax liability; and other risks and uncertainties
detailed from time to time in Ceragon's Annual Report on Form 20-F
and Ceragon's other filings with the Securities and Exchange
Commission, and represent our views only as of the date they are
made and should not be relied upon as representing our views as of
any subsequent date. We do not assume any obligation to update any
forward-looking statements.
|
Investors:
|
|
Doron
Arazi
|
or
|
Claudia
Gatlin
|
|
+972-3-5431-660
|
+1-212-830-9080
|
|
dorona@ceragon.com
|
claudiag@ceragon.com
|
|
|
|
Media:
|
|
|
Tanya
Solomon
|
|
|
+972-3-5431-163
|
|
|
tanyas@ceragon.com
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(U.S. dollars in
thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
79,132
|
|
$
85,367
|
|
$
208,976
|
|
$
273,792
|
|
Cost of
revenues
|
|
53,094
|
|
58,156
|
|
137,357
|
|
195,647
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
26,038
|
|
27,211
|
|
71,619
|
|
78,145
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
5,339
|
|
5,493
|
|
15,977
|
|
17,662
|
|
Selling and
marketing
|
|
9,608
|
|
10,045
|
|
29,181
|
|
30,834
|
|
General and
administrative
|
|
5,328
|
|
5,501
|
|
15,438
|
|
15,762
|
|
Restructuring
costs
|
|
-
|
|
-
|
|
-
|
|
1,225
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
20,275
|
|
21,039
|
|
60,596
|
|
65,483
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
5,763
|
|
6,172
|
|
11,023
|
|
12,662
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
1,519
|
|
2,966
|
|
4,809
|
|
12,473
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
4,244
|
|
3,206
|
|
6,214
|
|
189
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
|
761
|
|
1,763
|
|
3,118
|
|
4,410
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
3,483
|
|
$
1,443
|
|
$
3,096
|
|
$
(4,221)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
|
$
0.04
|
|
$
0.02
|
|
$
0.04
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
|
$
0.04
|
|
$
0.02
|
|
$
0.04
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing
basic net income
(loss) per
share
|
|
77,711,946
|
|
77,221,170
|
|
77,680,541
|
|
77,179,760
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing
diluted net
income (loss) per
share
|
|
79,284,558
|
|
77,355,761
|
|
78,286,712
|
|
77,179,760
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(U.S. dollars in
thousands)
|
|
|
|
|
|
|
|
September
30,
2016
|
|
December 31,
2015
|
|
|
Unaudited
|
|
Audited
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
32,374
|
|
$
36,318
|
|
Trade receivables,
net
|
|
109,615
|
|
116,683
|
|
Deferred
taxes
|
|
534
|
|
1,633
|
|
Other accounts
receivable and prepaid expenses
|
|
20,868
|
|
22,583
|
|
Inventories
|
|
44,182
|
|
49,690
|
|
Total current
assets
|
|
207,573
|
|
226,907
|
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
|
Deferred
tax assets, net
|
|
-
|
|
189
|
|
Severance
pay and pension fund
|
|
4,546
|
|
4,681
|
|
Property
and equipment, net
|
|
26,748
|
|
28,906
|
|
Intangible assets,
net
|
|
1,958
|
|
3,192
|
|
Other
non-current assets
|
|
1,738
|
|
1,457
|
|
Total long-term
assets
|
|
34,990
|
|
38,425
|
|
Total assets
|
|
$
242,563
|
|
$
265,332
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Short term loan,
including current maturities of long term bank loan
|
|
$
20,300
|
|
$
34,922
|
|
Trade
payables
|
|
64,212
|
|
71,721
|
|
Deferred
revenues
|
|
4,426
|
|
8,901
|
|
Other accounts payable
and accrued expenses
|
|
23,383
|
|
27,052
|
|
Total current
liabilities
|
|
112,321
|
|
142,596
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
Accrued severance pay
and pension
|
|
9,310
|
|
9,276
|
|
Other long term
payables
|
|
12,569
|
|
10,639
|
|
Total long-term
liabilities
|
|
21,879
|
|
19,915
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
Share
capital:
|
|
|
|
|
|
Ordinary shares
|
|
214
|
|
214
|
|
Additional paid-in
capital
|
|
409,114
|
|
408,174
|
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
|
Other comprehensive
loss
|
|
(7,110)
|
|
(8,616)
|
|
Accumulated
deficits
|
|
(273,764)
|
|
(276,860)
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
108,363
|
|
102,821
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
242,563
|
|
$
265,332
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
(U.S. dollars, in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
3,483
|
|
$
1,443
|
|
$
3,096
|
|
$
(4,221)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,527
|
|
2,844
|
|
7,503
|
|
9,066
|
|
Stock-based
compensation expense
|
281
|
|
600
|
|
873
|
|
1,172
|
|
Decrease (increase) in
trade and other receivables, net
|
(19,180)
|
|
17,306
|
|
11,323
|
|
36,662
|
|
Decrease in inventory,
net of write off
|
4,565
|
|
1,563
|
|
6,168
|
|
11,211
|
|
Increase
(decrease) in trade payables and ccrued liabilities
|
8,269
|
|
(13,140)
|
|
(10,176)
|
|
(38,471)
|
|
Increase (decrease) in
deferred revenues
|
459
|
|
(3,176)
|
|
(4,475)
|
|
(7,604)
|
|
Decrease in deferred
tax asset, net
|
84
|
|
988
|
|
1,289
|
|
2,441
|
|
Other
adjustments
|
276
|
|
(595)
|
|
168
|
|
(784)
|
|
Net cash provided
by operating activities
|
$
764
|
|
$
7,833
|
|
$
15,769
|
|
$
9,472
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of
property and equipment
|
(1,825)
|
|
(847)
|
|
(5,433)
|
|
(4,320)
|
|
Investment in
short-term bank deposits
|
-
|
|
(15)
|
|
(153)
|
|
(19)
|
|
Proceeds from
short-term bank deposits
|
153
|
|
-
|
|
153
|
|
64
|
|
Proceeds from
sale of available for sale marketable securities, net
|
-
|
|
-
|
|
-
|
|
122
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
(1,672)
|
|
$
(862)
|
|
$
(5,433)
|
|
$
(4,153)
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from exercise
of options
|
60
|
|
112
|
|
67
|
|
112
|
|
Proceeds from issuance
of shares, net
|
-
|
|
-
|
|
-
|
|
-
|
|
Proceeds from bank
loans
|
-
|
|
-
|
|
-
|
|
4,200
|
|
Repayment of bank
loans
|
(1,150)
|
|
(7,058)
|
|
(14,622)
|
|
(11,174)
|
|
Net cash used in
financing activities
|
$
(1,090)
|
|
$
(6,946)
|
|
$
(14,555)
|
|
$
(6,862)
|
|
|
|
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
$
(5)
|
|
$
(356)
|
|
$
275
|
|
$
(676)
|
|
Decrease in cash
and cash equivalents
|
$
(2,003)
|
|
$
(331)
|
|
$
(3,944)
|
|
$
(2,219)
|
|
Cash and cash
equivalents at the beginning of the period
|
34,377
|
|
39,535
|
|
36,318
|
|
41,423
|
|
Cash and cash
equivalents at the end of the period
|
$
32,374
|
|
$
39,204
|
|
$
32,374
|
|
$
39,204
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
|
(U.S. dollars in
thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
53,094
|
|
$
|
58,156
|
|
$
|
137,357
|
|
$
|
195,647
|
|
Amortization of
intangible assets
|
|
|
(309)
|
|
|
(310)
|
|
|
(922)
|
|
|
(919)
|
|
Stock based
compensation expenses
|
|
|
(5)
|
|
|
(34)
|
|
|
(26)
|
|
|
(44)
|
|
Changes in
pre-acquisition indirect tax positions
|
|
|
(403)
|
|
|
(129)
|
|
|
(806)
|
|
|
(277)
|
|
Non-GAAP cost
of revenues
|
|
$
|
52,377
|
|
$
|
57,683
|
|
$
|
135,603
|
|
$
|
194,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
26,038
|
|
$
|
27,211
|
|
$
|
71,619
|
|
$
|
78,145
|
|
Gross profit
adjustments
|
|
|
717
|
|
|
473
|
|
|
1,754
|
|
|
1,240
|
|
Non-GAAP gross
profit
|
|
$
|
26,755
|
|
$
|
27,684
|
|
$
|
73,373
|
|
$
|
79,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
|
5,339
|
|
$
|
5,493
|
|
$
|
15,977
|
|
$
|
17,662
|
|
Stock based
compensation expenses
|
|
|
(8)
|
|
|
(215)
|
|
|
(134)
|
|
|
(556)
|
|
Non-GAAP Research and
development expenses
|
|
$
|
5,331
|
|
$
|
5,278
|
|
$
|
15,843
|
|
$
|
17,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
|
9,608
|
|
$
|
10,045
|
|
$
|
29,181
|
|
$
|
30,834
|
|
Amortization of
intangible assets
|
|
|
(105)
|
|
|
(280)
|
|
|
(311)
|
|
|
(489)
|
|
Stock based
compensation expenses
|
|
|
(96)
|
|
|
(173)
|
|
|
(315)
|
|
|
(386)
|
|
Non-GAAP Sales and
Marketing expenses
|
|
$
|
9,407
|
|
$
|
9,592
|
|
$
|
28,555
|
|
$
|
29,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
|
5,328
|
|
$
|
5,501
|
|
$
|
15,438
|
|
$
|
15,762
|
|
Stock based
compensation expenses
|
|
|
(174)
|
|
|
(178)
|
|
|
(399)
|
|
|
(186)
|
|
Non-GAAP General and
Administrative expenses
|
|
$
|
5,154
|
|
$
|
5,323
|
|
$
|
15,039
|
|
$
|
15,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP financial
expenses
|
|
$
|
1,519
|
|
$
|
2,966
|
|
$
|
4,809
|
|
$
|
12,473
|
|
Currency devaluation
in Venezuela related expenses
|
|
|
-
|
|
|
-
|
|
|
907
|
|
|
(2,973)
|
|
Non-GAAP financial
expenses
|
|
$
|
1,519
|
|
$
|
2,966
|
|
$
|
5,716
|
|
$
|
9,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP taxes on
income
|
|
$
|
761
|
|
$
|
1,763
|
|
$
|
3,118
|
|
$
|
4,410
|
|
Changes in
pre-acquisition tax liability
|
|
|
-
|
|
|
-
|
|
|
(453)
|
|
|
-
|
|
Other non-cash tax
adjustments
|
|
|
(189)
|
|
|
(945)
|
|
|
(677)
|
|
|
(2,535)
|
|
Non-GAAP taxes on
income
|
|
$
|
572
|
|
$
|
818
|
|
$
|
1,988
|
|
$
|
1,875
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
|
(U.S. dollars in
thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
|
3,483
|
|
$
|
1,443
|
|
$
|
3,096
|
|
$
|
(4,221)
|
|
|
Amortization of
intangible assets
|
|
|
414
|
|
|
590
|
|
|
1,223
|
|
|
1,408
|
|
|
Stock based
compensation expenses
|
|
|
283
|
|
|
600
|
|
|
874
|
|
|
1,172
|
|
|
Restructuring
expenses
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,225
|
|
|
Changes in
pre-acquisition tax exposures
|
|
|
403
|
|
|
129
|
|
|
1,259
|
|
|
277
|
|
|
Currency devaluation
in Venezuela related expenses
|
|
|
-
|
|
|
-
|
|
|
(907)
|
|
|
2,973
|
|
|
Non-cash tax
adjustments
|
|
|
189
|
|
|
945
|
|
|
677
|
|
|
2,535
|
|
|
Non-GAAP net
income
|
|
$
|
4,772
|
|
$
|
3,707
|
|
$
|
6,232
|
|
$
|
5,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and
diluted net income (loss) per share
|
|
$
|
0.06
|
|
$
|
0.02
|
|
$
|
0.08
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and
diluted net income (loss) per share
|
|
$
|
0.06
|
|
$
|
0.05
|
|
$
|
0.08
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income
(loss) per share
|
|
|
77,711,946
|
|
|
77,221,170
|
|
|
77,680,541
|
|
|
77,179,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
GAAP diluted net
income (loss) per share
|
|
|
79,284,558
|
|
|
77,355,761
|
|
|
78,286,712
|
|
|
77,179,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
Non-GAAP diluted net
income per share
|
|
|
79,780,138
|
|
|
78,011,917
|
|
|
78,682,661
|
|
|
77,868,331
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ceragon-networks-reports-third-quarter-2016-financial-results-300362035.html
SOURCE Ceragon Networks Ltd