LITTLE FALLS, New Jersey,
Nov. 4, 2019 /PRNewswire/ -- Ceragon
Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist
today reported results for the third quarter which ended
September 30, 2019.
Third Quarter 2019 Highlights:
Revenues - $72.2 million,
down 16.6% from the third quarter of 2018, and down 1.1% from the
second quarter of 2019.
Gross margin – 32.2%, compared to
35.0% in the third quarter of
2018 and 36.1% in the second quarter of
2019.
Operating income - $2.1 million, compared to
$7.9 million in the third quarter of
2018, and $4.1 million
in the second quarter of 2019.
Net income - $0.2 million, or $0.00 per diluted share for the third quarter of
2019, compared to $6.2 million, or
$0.08 per diluted share, in the third
quarter of 2018. Net income for the second quarter of 2019 was
$0.8 million, or $0.01 per diluted share.
Non-GAAP results – Gross margin was 32.2%, operating
income was $2.6 million, and net
income was $0.5 million, or
$0.01 per diluted share. For
reconciliation of GAAP to non-GAAP results, see the attached
tables.
Cash and cash equivalents - $20.5
million at September 30, 2019,
compared to $29.0 million at
June 30, 2019.
"Results in Q3 were affected mainly by the slowdown in
India and a delay in one large
project in Latin America," said
Ira Palti, president and CEO of
Ceragon. "We are seeing areas of strength in demand, excluding
India, and we expect revenue in
most regions to improve in Q4 and also during 2020, allowing for
typical seasonality in Q1. Driving overall growth next year,
particularly in the second half, will be new 5G design wins we
currently have in hand.
"Like many other companies in our industry, we have found it
necessary to adjust our short-term expectations based on growing
global uncertainties such as trade and economic trends causing a
more cautious spending environment, coupled with the specific
challenges facing operators as they gear up to 5G technology.
During this period of transition, we intend to focus on reinforcing
our technology leadership with ongoing investment in R&D,
maintaining our financial strength with tight expense control,
strong working capital management and remaining resilient in order
to fully capitalize on the ramp in 5G deployments."
Supplemental geographical breakdown of revenue for the
third quarter of 2019:
-
Europe:
15%
-
Africa:
6%
- North America: 11%
- Latin America: 17%
-
India:
29%
-
APAC:
22%
A conference call to discuss the results will begin at
9:00 a.m. EST. Investors are invited
to join the Company's teleconference by calling USA: (800) 230-1092 or International: +1 (612)
288-0337, from 8:50 a.m. EST. 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: 473032. A replay of
both the call and the webcast will be available through
December 4, 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.
Join the discussion
LinkedIn: https://www.linkedin.com/company/ceragon-networks
Facebook: https://www.facebook.com/ceragonnetworks/
Twitter: https://twitter.com/Ceragon
YouTube: https://www.youtube.com/user/CeragonNetworks?feature=mhumhttp://www.backhaulforum.com/
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; the risk of delays in converting design wins
into revenue; 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
Third Quarter 2019 Results
|
|
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,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
72,163
|
|
$
86,529
|
|
$
214,327
|
|
$
258,132
|
Cost of
revenues
|
|
48,924
|
|
56,245
|
|
140,095
|
|
171,495
|
Gross profit
|
|
23,239
|
|
30,284
|
|
74,232
|
|
86,637
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
6,736
|
|
7,436
|
|
19,154
|
|
21,471
|
Selling and
marketing
|
|
9,756
|
|
10,510
|
|
29,339
|
|
31,441
|
General and
administrative
|
|
4,610
|
|
4,438
|
|
16,246
|
|
14,087
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
$
21,102
|
|
$
22,384
|
|
$
64,739
|
|
$
66,999
|
Operating
income
|
|
2,137
|
|
7,900
|
|
9,493
|
|
19,638
|
Financial expenses,
net
|
|
1,378
|
|
797
|
|
4,317
|
|
5,477
|
Income before
taxes
|
|
759
|
|
7,103
|
|
5,176
|
|
14,161
|
Taxes on
income
|
|
415
|
|
952
|
|
2,947
|
|
2,714
|
Equity loss in
affiliates
|
|
158
|
|
-
|
|
472
|
|
-
|
Net income
|
|
$
186
|
|
$
6,151
|
|
$
1,757
|
|
$
11,447
|
Basic net income per
share
|
|
$
0.00
|
|
$
0.08
|
|
$
0.02
|
|
$
0.15
|
Diluted net income per
share
|
|
$
0.00
|
|
$
0.08
|
|
$
0.02
|
|
$
0.14
|
Weighted average number
of shares
used in computing basic net income per share
|
|
80,303,699
|
|
78,455,128
|
|
80,202,791
|
|
78,256,060
|
Weighted average number
of shares used in
computing diluted net income per share
|
|
81,652,356
|
|
81,172,392
|
|
82,012,013
|
|
80,696,365
|
Ceragon Reports
Third Quarter 2019 Results
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
September
30, 2019
|
|
December
31, 2018
|
ASSETS
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
20,524
|
|
$
35,581
|
Short - term bank
deposits
|
|
-
|
|
515
|
Trade receivables,
net
|
|
126,196
|
|
123,451
|
Other accounts
receivable and prepaid expenses
|
|
14,270
|
|
12,135
|
Inventories
|
|
67,717
|
|
53,509
|
Total current
assets
|
|
228,707
|
|
225,191
|
NON-CURRENT
ASSETS:
|
|
|
|
|
Long-term bank
deposits
|
|
16
|
|
504
|
Deferred tax
assets
|
|
6,824
|
|
7,476
|
Severance pay and pension fund
|
|
5,773
|
|
5,096
|
Property and equipment, net
|
|
34,890
|
|
33,613
|
Intangible assets, net
|
|
8,003
|
|
6,576
|
Other non-current
assets
|
|
17,854
|
|
4,544
|
Total non-current
assets
|
|
73,360
|
|
57,809
|
Total assets
|
|
$
302,067
|
|
$
283,000
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
60,357
|
|
$
78,892
|
Deferred
revenues
|
|
4,734
|
|
3,873
|
Short- term
loans
|
|
17,400
|
|
-
|
Other accounts payable
and accrued expenses
|
|
27,291
|
|
27,256
|
Total current
liabilities
|
|
109,782
|
|
110,021
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Deferred tax
liability
|
|
18
|
|
28
|
Accrued severance pay
and pension
|
|
10,595
|
|
9,711
|
Deferred
revenues
|
|
6,265
|
|
-
|
Other long-term
payables
|
|
11,529
|
|
3,672
|
Total long-term
liabilities
|
|
28,407
|
|
13,411
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary shares
|
|
215
|
|
214
|
Additional paid-in
capital
|
|
417,392
|
|
415,408
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
Other comprehensive
loss
|
|
(8,640)
|
|
(9,208)
|
Accumulated
deficits
|
|
(224,998)
|
|
(226,755)
|
Total shareholders' equity
|
|
163,878
|
|
159,568
|
Total liabilities
and shareholders' equity
|
|
$
302,067
|
|
$
283,000
|
Ceragon Reports
Third Quarter 2019 Results
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
186
|
|
$
6,151
|
|
$
1,757
|
|
$
11,447
|
Adjustments to
reconcile net income to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,573
|
|
2,094
|
|
7,011
|
|
5,595
|
Stock-based
compensation expense
|
422
|
|
450
|
|
1,594
|
|
1,482
|
Decrease (increase) in
trade and other receivables, net
|
6,616
|
|
3,804
|
|
(3,572)
|
|
3,695
|
Decrease (increase) in
inventory, net of write off
|
5,736
|
|
(1,719)
|
|
(15,077)
|
|
5,330
|
Decrease (increase) in
deferred tax asset, net
|
(194)
|
|
(62)
|
|
1,042
|
|
348
|
Increase
(decrease) in trade payables and accrued liabilities
|
(30,760)
|
|
2,824
|
|
(21,297)
|
|
(7,413)
|
Increase in long and
short – term deferred revenues
|
1,023
|
|
1,684
|
|
7,173
|
|
3,480
|
Other
adjustments
|
(33)
|
|
295
|
|
(169)
|
|
109
|
Net cash provided
by (used in) operating activities
|
$
(14,431)
|
|
$
15,521
|
|
$
(21,538)
|
|
$
24,073
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
Purchase of property
and equipment, net
|
(2,409)
|
|
(2,276)
|
|
(9,116)
|
|
(6,233)
|
Purchase of intangible
assets, net
|
(249)
|
|
(1,488)
|
|
(3,041)
|
|
(2,824)
|
Proceeds from
bank deposits
|
-
|
|
-
|
|
920
|
|
-
|
Net cash used in
investing activities
|
$
(2,658)
|
|
$
(3,764)
|
|
$
(11,237)
|
|
$
(9,057)
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from share
options exercise
|
135
|
|
189
|
|
391
|
|
563
|
Proceeds of short-term
bank credits and loans, net
|
8,500
|
|
-
|
|
17,400
|
|
-
|
Net cash
provided by financing activities
|
$
8,635
|
|
$
189
|
|
$
17,791
|
|
$
563
|
Translation
adjustments on cash and cash equivalents
|
$
(63)
|
|
$
(22)
|
|
$
(73)
|
|
$
(134)
|
Increase
(decrease) in cash and cash equivalents
|
$
(8,517)
|
|
$
11,924
|
|
$
(15,057)
|
|
$
15,445
|
Cash and cash
equivalents at the beginning of the period
|
29,041
|
|
29,398
|
|
35,581
|
|
25,877
|
Cash and cash
equivalents at the end of the period
|
$
20,524
|
|
$
41,322
|
|
$
20,524
|
|
$
41,322
|
Ceragon Reports
Third Quarter 2019 Results
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
|
(U.S. dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
48,924
|
|
$
|
56,245
|
|
$
|
140,095
|
|
171,495
|
Stock based
compensation
expenses
|
|
|
(13)
|
|
|
(15)
|
|
|
(44)
|
|
(33)
|
Changes in indirect
tax positions
|
|
|
(4)
|
|
|
(11)
|
|
|
(34)
|
|
(38)
|
Non-GAAP cost
of revenues
|
|
$
|
48,907
|
|
$
|
56,219
|
|
$
|
140,017
|
|
171,424
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
23,239
|
|
$
|
30,284
|
|
$
|
74,232
|
|
86,637
|
Gross profit
adjustments
|
|
|
17
|
|
|
26
|
|
|
78
|
|
71
|
Non-GAAP gross
profit
|
|
$
|
23,256
|
|
$
|
30,310
|
|
$
|
74,310
|
|
86,708
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development
expenses
|
|
$
|
6,736
|
|
$
|
7,436
|
|
$
|
19,154
|
|
21,471
|
Stock based
compensation
expenses
|
|
|
(84)
|
|
|
(83)
|
|
|
(285)
|
|
(210)
|
Non-GAAP Research
and
development expenses
|
|
$
|
6,652
|
|
$
|
7,353
|
|
$
|
18,869
|
|
21,261
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing
expenses
|
|
$
|
9,756
|
|
$
|
10,510
|
|
$
|
29,339
|
|
31,441
|
Stock based
compensation
expenses
|
|
|
(171)
|
|
|
(161)
|
|
|
(553)
|
|
(447)
|
Non-GAAP Sales and
Marketing
expenses
|
|
$
|
9,585
|
|
$
|
10,349
|
|
$
|
28,786
|
|
30,994
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative
expenses
|
|
$
|
4,610
|
|
$
|
4,438
|
|
$
|
16,246
|
|
14,087
|
Stock based
compensation
expenses
|
|
|
(154)
|
|
|
(191)
|
|
|
(712)
|
|
(792)
|
Non-GAAP General
and
Administrative expenses
|
|
$
|
4,456
|
|
$
|
4,247
|
|
$
|
15,534
|
|
13,295
|
GAAP financial
expenses
|
|
$
|
1,378
|
|
$
|
797
|
|
$
|
4,317
|
|
5,477
|
Recovery of
devaluation related
expenses in Venezuela
|
|
|
-
|
|
|
969
|
|
|
-
|
|
969
|
Leases – financial
income (expenses)
|
|
|
91
|
|
|
-
|
|
|
(101)
|
|
-
|
Non-GAAP financial
expenses
|
|
$
|
1,469
|
|
$
|
1,766
|
|
$
|
4,216
|
|
6,446
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Tax
expenses
|
|
$
|
415
|
|
$
|
952
|
|
$
|
2,947
|
|
2,714
|
Non cash tax
adjustments
|
|
|
182
|
|
|
(58)
|
|
|
(1,090)
|
|
(526)
|
Non-GAAP Tax
expenses
|
|
$
|
597
|
|
$
|
894
|
|
$
|
1,857
|
|
2,188
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP equity loss in
affiliates
|
|
$
|
158
|
|
$
|
-
|
|
$
|
472
|
|
-
|
Other non-cash
adjustments
|
|
|
(158)
|
|
|
-
|
|
|
(472)
|
|
-
|
Non-GAAP equity loss
in affiliates
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
-
|
Ceragon Reports
Third 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
|
Nine months
ended,
|
|
September
30,
|
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
|
$
|
186
|
|
$
|
6,151
|
|
$
|
1,757
|
|
$
|
11,447
|
Stock based
compensation expenses
|
|
|
422
|
|
|
450
|
|
|
1,594
|
|
|
1,482
|
Changes in indirect
tax positions
|
|
|
4
|
|
|
11
|
|
|
34
|
|
|
38
|
Leases – financial
expenses (income)
|
|
|
(91)
|
|
|
-
|
|
|
101
|
|
|
-
|
Non-cash tax
adjustments
|
|
|
(182)
|
|
|
58
|
|
|
1,090
|
|
|
526
|
Recovery of
devaluation related
expenses in Venezuela
|
|
|
-
|
|
|
(969)
|
|
|
-
|
|
|
(969)
|
Other non-cash
adjustment
|
|
|
158
|
|
|
-
|
|
|
472
|
|
|
-
|
Non-GAAP net
income
|
|
$
|
497
|
|
$
|
5,701
|
|
$
|
5,048
|
|
$
|
12,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic net income
per share
|
|
$
|
0.00
|
|
$
|
0.08
|
|
$
|
0.02
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
$
|
0.00
|
|
$
|
0.08
|
|
$
|
0.02
|
|
$
|
0.14
|
Non-GAAP diluted net
income per share
|
|
$
|
0.01
|
|
$
|
0.07
|
|
$
|
0.06
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
used in computing GAAP
basic net income per share
|
|
|
80,303,699
|
|
|
78,455,128
|
|
|
80,202,791
|
|
|
78,256,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
used in computing GAAP diluted net
income per share
|
|
|
81,652,356
|
|
|
81,172,392
|
|
|
82,012,013
|
|
|
80,696,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
used in computing
Non-GAAP diluted net income per
share
|
|
|
81,814,367
|
|
|
81,546,013
|
|
|
82,254,919
|
|
|
81,027,179
|
Contact:
Investors:
Ran Vered
+972-3-543-1595
investor@ceragon.com
Media:
Tanya
Solomon
+972-3-5431163
media@ceragon.com
View original
content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-third-quarter-2019-financial-results-300950660.html
SOURCE Ceragon Networks Ltd