Ceragon Networks Reports Second Quarter 2019 Financial Results

Date : 08/12/2019 @ 11:00AM
Source : PR Newswire (US)
Stock : Ceragon Networks Ltd (CRNT)
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Ceragon Networks Reports Second Quarter 2019 Financial Results

Ceragon Networks (NASDAQ:CRNT)
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LITTLE FALLS, New Jersey, Aug. 12, 2019 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2019.

Second Quarter 2019 Highlights:

Revenues - $73.0 million, down 17.4% from the second quarter of 2018, and up 5.5% from the first quarter of 2019.

Gross margin – 36.1%, compared to 32.5% in the second quarter of 2018 and 35.6% in the first quarter of 2019.

Operating income - $4.1 million, compared to $6.4 million in the second quarter of 2018, and $3.2 million in the first quarter of 2019.

Net income - $0.8 million, or $0.01 per diluted share for the second quarter of 2019, compared to $3.2 million, or $0.04 per diluted share, in the second quarter of 2018. Net income for the first quarter of 2019 was $0.8 million, or $0.01 per diluted share.

Non-GAAP results – Gross margin was 36.1%, operating income was $4.8 million, and net income was $2.5 million, or $0.03 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Cash and cash equivalents - $29.0 million at June 30, 2019, compared to $29.8 million at March 31, 2019.

"Growth in several regions accounted for the sequential increase in revenue during the second quarter, although the overall revenue level continued to reflect the delay in receiving orders from our customers in India," said Ira Palti, president and CEO of Ceragon. "We are pleased to report that, during Q2, we added new design wins for 5G in North America, Europe, and Asia Pacific which we expect to begin contributing to revenue during the second half of next year.

"Excluding India, revenue from other regions increased substantially in the first half of 2019 compared to the first half of 2018, and we expect to see this trend continue. Looking to the second half of 2019, it now appears that our revenue from India will be affected not only by the order delays but also by a slowdown in the pace of deployment activity, preventing us from reaching our net income goal and causing net income for 2019 to decline compared to 2018," Mr. Palti explained. 

Supplemental geographical breakdown of revenue for the second quarter of 2019:

·  Europe:

13%

·  Africa:

11%

·  North America:

20%

·  Latin America:

28%

·  India:

10%

·  APAC:           

18%

 

A conference call to discuss the results will begin at 9:00 a.m. EDT. Investors are invited to join the Company's teleconference by calling USA: (800) 230-1085 or International: +1 (612) 288-0340, 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: https://www.ceragon.com/investors/webcasts, 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: 469750. A replay of both the call and the webcast will be available through September 12, 2019.

About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless backhaul specialist. We help operators and other service providers worldwide smoothly evolve their networks towards 5G, while increasing operational efficiency and enhancing end customers' quality of experience, with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, that use our solutions to deliver mission-critical multimedia services and other applications at high reliability and speed. Ceragon's unique multicore technology and wireless backhaul solutions provide highly reliable, 5G high-capacity connectivity with minimal use of spectrum, power and other resources. Our solutions enable 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. Ceragon's 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: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, growth prospects, 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  risks relating to the concentration of a significant portion of Ceragon's expected business in certain geographic regions and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues, including the risks of deviations from our expectations of timing and size of orders from these customers; the risk that the current slowdown in revenue from India could extend for a longer period than anticipated: risks associated with any failure to effectively compete with other wireless equipment providers; the risk that the rollout of 5G services could take longer than anticipated; 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, that 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. 

-tables follow-

 

Ceragon Reports Second Quarter 2019 Results


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)



Three months ended
June 30,


Six months ended
June 30,




2019



2018



2019



2018



























Revenues


$

73,001


$

88,328


$

142,164


$

171,603

Cost of revenues



46,640



59,579



91,171



115,250














Gross profit



26,361



28,749



50,993



56,353














Operating expenses:













Research and development, net



6,254



6,821



12,418



14,035

Selling and marketing



10,121



10,369



19,583



20,931

General and administrative



5,854



5,190



11,636



9,649














Total operating expenses


$

22,229


$

22,380


$

43,637


$

44,615














Operating income



4,132



6,369



7,356



11,738














Financial expenses, net



1,830



2,646



2,939



4,680














Income before taxes



2,302



3,723



4,417



7,058














Taxes on income



1,398



497



2,532



1,762

Equity loss in affiliates



141



-



314



-














Net income


$

763


$

3,226


$

1,571


$

5,296














Basic net income per share


$

0.01


$

0.04


$

0.02


$

0.07

Diluted net income per share


$

0.01


$

0.04


$

0.02


$

0.07














Weighted average number of shares 
   used in computing basic net income  
   per share



80,192,036



78,231,726



80,153,038



78,155,810














Weighted average number of shares 
   used in computing diluted net 
   income per share



82,051,028



80,850,353



82,192,544



80,457,636


 

Ceragon Reports Second Quarter 2019 Results


CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)



June 30,
2019


December 31,
2018

ASSETS



Unaudited



Audited








CURRENT ASSETS:







Cash and cash equivalents


$

29,041


$

35,581

Short - term bank deposits



-



515

Trade receivables, net



121,449



123,451

Other accounts receivable and prepaid expenses



13,783



12,135

Inventories



73,900



53,509








Total current assets



238,173



225,191








NON-CURRENT ASSETS:







Long-term bank deposits



29



504

Deferred tax assets



6,236



7,476

   Severance pay and pension fund



5,574



5,096

   Property and equipment, net



35,009



33,613

   Intangible assets, net



7,670



6,576

Other non-current assets



15,822



4,544








Total non-current assets



70,340



57,809








Total assets


$

308,513


$

283,000








LIABILITIES AND SHAREHOLDERS' EQUITY














CURRENT LIABILITIES:







Trade payables


$

79,431


$

78,892

Deferred revenues



3,770



3,873

Short- term loans



8,900



-

Other accounts payable and accrued expenses



26,385



27,256








Total current liabilities



118,486



110,021








LONG-TERM LIABILITIES:







Deferred tax liability



24



28

Accrued severance pay and pension



10,053



9,711

Deferred revenues



6,265



-

Other long-term payables



9,926



3,672








Total long-term liabilities



26,268



13,411








SHAREHOLDERS' EQUITY:







Share capital:







    Ordinary shares



215



214

Additional paid-in capital



416,835



415,408

Treasury shares at cost



(20,091)



(20,091)

Other comprehensive loss



(8,016)



(9,208)

Accumulated deficits



(225,184)



(226,755)








Total shareholders' equity



163,759



159,568








Total liabilities and shareholders' equity


$

308,513


$

283,000

 

 

Ceragon Reports Second Quarter 2019 Results


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)





Three months ended
June 30,



Six months ended
June 30,




2019



2018



2019



2018

Cash flow from operating activities:













Net income


$

763


$

3,226


$

1,571


$

5,296

Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:













Depreciation and amortization



2,318



1,990



4,438



3,501

Stock-based compensation expense



697



679



1,172



1,032

Increase in trade and other receivables,
net



(3,797)



(292)



(10,188)



(109)

Decrease (increase) in inventory, net of
write off



(6,663)



2,561



(20,813)



7,049

Decrease (increase) in deferred tax asset,
net



646



(64)



1,236



410

 Increase (decrease) in trade payables and 
accrued liabilities



(6,120)



(4,383)



9,463



(10,237)

Increase in long and short – term deferred
revenues



5,774



856



6,150



1,796

Other adjustments



(105)



(394)



(136)



(186)

Net cash provided by (used in) operating
activities


$

(6,487)


$

4,179


$

(7,107)


$

8,552














Cash flow from investing activities:













Purchase of property and equipment, net



(2,716)



(658)



(6,707)



(3,957)

Purchase of intangible assets, net



(603)



(250)



(2,792)



(1,336)

  Release (purchase) of long and short – 
     term bank deposit



(20)



-



920



-

Net cash used in investing activities


$

(3,339)


$

(908)


$

(8,579)


$

(5,293)














Cash flow from financing activities:













Proceeds from share options exercise



190



274



256



374

Proceeds of short-term bank credits and
loans, net



8,900



-



8,900



-

Net cash provided by financing activities


$

9,090


$

274


$

9,156


$

374














Translation adjustments on cash and
cash equivalents


$

23


$

(103)


$

(10)


$

(112)

Increase (decrease) in cash and cash
equivalents


$

(713)


$

3,442


$

(6,540)


$

3,521

Cash and cash equivalents at the beginning
of the period



29,754



25,956



35,581



25,877

Cash and cash equivalents at the end of
the period


$

29,041


$

29,398


$

29,041


$

29,398

 










Ceragon Reports Second Quarter 2019 Results 


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands)

(Unaudited)








Three months ended


Six months ended



June 30,


June 30,



2019


2018


2019


2018














GAAP cost of revenues


$

46,640


$

59,579


$

91,171


$

115,250

Stock based compensation expenses



(16)



(1)



(31)



(18)

Changes in indirect tax positions



(9)



(12)



(30)



(27)

Non-GAAP cost of revenues


$

46,615


$

59,566


$

91,110


$

115,205














GAAP gross profit


$

26,361


$

28,749


$

50,993


$

56,353

Gross profit adjustments



25



13



61



45

Non-GAAP gross profit


$

26,386


$

28,762


$

51,054


$

56,398














GAAP Research and development expenses


$

6,254


$

6,821


$

12,418


$

14,035

Stock based compensation expenses



(98)



(67)



(201)



(127)

Non-GAAP Research and development expenses


$

6,156


$

6,754


$

12,217


$

13,908














GAAP Sales and Marketing expenses


$

10,121


$

10,369


$

19,583


$

20,931

Stock based compensation expenses



(207)



(142)



(382)



(286)

Non-GAAP Sales and Marketing expenses


$

9,914


$

10,227


$

19,201


$

20,645














GAAP General and Administrative expenses


$

5,854


$

5,190


$

11,636


$

9,649

Stock based compensation expenses



(376)



(469)



(558)



(601)

Non-GAAP General and Administrative expenses


$

5,478


$

4,721


$

11,078


$

9,048














GAAP financial expenses


$

1,830


$

2,646


$

2,939


$

4,680

Leases – financial income (expenses)



(218)



-



(192)



-

Non-GAAP financial expenses


$

1,612


$

2,646


$

2,747


$

4,680














GAAP Tax expenses


$

1,398


$

497


$

2,532


$

1,762

Non cash tax adjustments



(654)



96



(1,272)



(468)

Non-GAAP Tax expenses


$

744


$

593


$

1,260


$

1,294

GAAP equity loss in affiliates


$

141


$

-


$

314



-

Other non-cash adjustments



(141)



-



(314)


$

-

Non-GAAP equity loss in affiliates


$

-


$

-


$

-


$

-


 

 

Ceragon Reports Second Quarter 2019 Results


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)



 Three months ended,

June 30,


Six months ended,
June 30,


2019


2018


2019


2018


GAAP net income 


$

763


$

3,226


$

1,571


$

5,296

Stock based compensation
expenses



697



679



1,172



1,032

Changes in indirect tax positions



9



12



30



27

Leases – financial expenses
(income)



218



-



192



-

Non-cash tax adjustments



654



(96)



1,272



468

Other non-cash adjustment



141



-



314



-

Non-GAAP net income 


$

2,482


$

3,821


$

4,551


$

6,823














GAAP basic net income per share


$

0.01


$

0.04


$

0.02


$

0.07














GAAP diluted net income per share


$

0.01


$

0.04


$

0.02


$

0.07

Non-GAAP basic and diluted net
income per share


$

0.03


$

0.05


$

0.06


$

0.08














Weighted average number of
shares used in computing GAAP
basic net income per share



80,192,036



78,231,726



80,153,038



78,155,810














Weighted average number of
shares used in computing GAAP
diluted net income per share



82,051,028



80,850,353



82,192,544



80,457,636














Weighted average number of
shares used in computing
Non-GAAP diluted net income per
share



82,249,605



81,156,546



82,475,897



80,767,046

 

Investors:
Ran Vered 
+972-3-543-1595
ranv@ceragon.com                     

Media:
Tanya Solomon
+972-3-5431163
tanyas@ceragon.com

 

 

Cision View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-second-quarter-2019-financial-results-300899853.html

SOURCE Ceragon Networks Ltd

Copyright 2019 PR Newswire

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