LITTLE FALLS, New Jersey,
Nov. 5, 2018 /PRNewswire/ -- Ceragon
Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist
today reported results for the third quarter which ended
September 30, 2018.
Third Quarter 2018 Highlights:
Revenues - $86.5 million, up 13.9% from the third
quarter of 2017, and down 2.0% from the second quarter of 2018.
Gross margin - 35.0%, compared to 35.1% in the third
quarter of 2017 and 32.5% in the second quarter of 2018.
Operating income - $7.9
million, compared to $5.7
million in the third quarter of 2017, and $6.4 million in the second quarter of 2018.
Net income - $6.2 million,
or $0.08 per diluted share for the
third quarter of 2018. Net income for the third quarter of
2017 was $3.5 million, or
$0.04 per diluted share. Net income
for the second quarter of 2018 was $3.2
million or $0.04 per diluted
share.
Non-GAAP results - gross margin was 35.0%, operating
income was $8.4 million, and net
income was $5.7 million, or
$0.07 per diluted share. For
reconciliation of GAAP to non-GAAP results, see the attached
tables.
Cash and cash equivalents - $41.3
million at September 30, 2018,
compared to $29.4 million at
June 30, 2018.
"We are pleased to report an excellent third quarter, with
revenues above the upper end of our quarterly run rate and net
income growing both sequentially and versus Q3 of 2017," said
Ira Palti, president and CEO of
Ceragon. "We are achieving our goal of growing net income and
delivering strong cash flow, even as we continue to invest
aggressively in our next generation 5G solutions, and we remain on
track to attain an increase in non-GAAP net income in 2018
compared to 2017. We manage the business with net income growth as
our most important metric, and our goal is to report further growth
in non-GAAP net income for 2019 as well."
Supplemental geographical breakdown of revenue for the third
quarter of 2018:
- Europe:
|
9%
|
- Africa:
|
10%
|
- North
America:
|
13%
|
- Latin
America:
|
21%
|
- India:
|
34%
|
- APAC:
|
13%
|
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) 230-1059 or International: +1 (612)
234-9959, 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:
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: 455394. A replay of
both the call and the webcast will be available through
December 5, 2018.
About Ceragon
Ceragon Networks Ltd. (NASDAQ: CRNT) is the world's #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 mission-critical multimedia
services and other applications at high reliability and speed.
Ceragon's unique multicore technology provides a highly reliable,
high-capacity 4G and 5G wireless backhaul with minimal use of
spectrum, power and other resources. It 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.
Join the Discussion
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Twitter: https://twitter.com/Ceragon
YouTube:
https://www.youtube.com/user/CeragonNetworks?feature=mhum
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 revenues, net
income, gross margin, capital expenditures and liquidity,
competitive pressures, 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 risks
associated with a decline in revenues due to our focus on a single
market segment; risks relating to the concentration of Ceragon's
business in certain geographic regions such as India, and in other developing nations; risk
relating to certain guarantees granted by Ceragon on behalf of
Orocom to FITEL, in the framework of the FITEL project; political,
economic and regulatory risks from doing business in developing
regions, including potential currency restrictions and
fluctuations; risks related to our ability to meet the demand for
our products due to shortages in raw materials, including certain
passive components; risks associated with a change in Ceragon's
gross margin as a result of changes in the geographic mix of
revenues and/or as a result of increase in costs of raw materials,
including certain passive components; risks associated with the
loss of a single customer or customer group, which represents a
significant portion of Ceragon's revenues; risks associated with
Ceragon's failure to effectively compete with other wireless
equipment providers; 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 2018 Results
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
86,529
|
|
$
75,999
|
|
$
258,132
|
|
$
245,354
|
Cost of
revenues
|
|
56,245
|
|
49,326
|
|
171,495
|
|
167,174
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
30,284
|
|
26,673
|
|
86,637
|
|
78,180
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
7,436
|
|
6,975
|
|
21,471
|
|
19,210
|
Selling and
marketing
|
|
10,510
|
|
9,543
|
|
31,441
|
|
29,319
|
General and
administrative
|
|
4,438
|
|
4,462
|
|
14,087
|
|
14,032
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
22,384
|
|
20,980
|
|
66,999
|
|
62,561
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
7,900
|
|
5,693
|
|
19,638
|
|
15,619
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
797
|
|
1,655
|
|
5,477
|
|
4,734
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
7,103
|
|
4,038
|
|
14,161
|
|
10,885
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
|
952
|
|
542
|
|
2,714
|
|
2,535
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
6,151
|
|
$
3,496
|
|
$
11,447
|
|
$
8,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
0.08
|
|
$
0.04
|
|
$
0.15
|
|
$
0.11
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
|
$
0.08
|
|
$
0.04
|
|
$
0.14
|
|
$
0.10
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing basic net income
per share
|
|
78,455,128
|
|
77,964,433
|
|
78,256,060
|
|
77,885,555
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing diluted net
income per share
|
|
81,172,392
|
|
79,596,845
|
|
80,696,365
|
|
80,105,482
|
Ceragon Reports
Third Quarter 2018 Results
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
41,322
|
|
$
25,877
|
Trade receivables,
net
|
|
113,193
|
|
113,719
|
Other accounts
receivable and prepaid expenses
|
|
11,435
|
|
17,052
|
Inventories
|
|
47,435
|
|
54,164
|
Total current
assets
|
|
213,385
|
|
210,812
|
|
|
|
|
|
NON-CURRENT ASSETS:
Long-term bank
deposits
|
|
997
|
|
996
|
Deferred
taxes, net
|
|
564
|
|
988
|
Severance
pay and pension fund
|
|
5,271
|
|
5,459
|
Property
and equipment, net
|
|
31,096
|
|
29,870
|
Intangible assets,
net
|
|
4,154
|
|
2,199
|
Other non-current
assets
|
|
3,481
|
|
3,269
|
Total non-current
assets
|
|
45,563
|
|
42,781
|
Total assets
|
|
$
258,948
|
|
$
253,593
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
66,168
|
|
$
75,476
|
Deferred
revenues
|
|
7,926
|
|
5,193
|
Other accounts payable
and accrued expenses
|
|
25,474
|
|
24,781
|
Total current
liabilities
|
|
99,568
|
|
105,450
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
Deferred tax liability
|
|
65
|
|
141
|
Accrued severance pay
and pension
|
|
10,006
|
|
10,085
|
Other long-term
payables
|
|
3,766
|
|
4,019
|
Total long-term
liabilities
|
|
13,837
|
|
14,245
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary
shares
|
|
214
|
|
214
|
Additional paid-in
capital
|
|
412,862
|
|
410,817
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
Other comprehensive
loss
|
|
(9,088)
|
|
(7,171)
|
Accumulated
deficits
|
|
(238,354)
|
|
(249,871)
|
|
|
|
|
|
Total shareholders'
equity
|
|
145,543
|
|
133,898
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
258,948
|
|
$
253,593
|
|
|
|
|
|
|
Ceragon Reports
Third Quarter 2018 Results
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
$
6,151
|
|
$
3,496
|
|
$
11,447
|
|
$
8,350
|
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,094
|
|
2,191
|
|
5,595
|
|
6,766
|
|
Stock-based
compensation expense
|
450
|
|
349
|
|
1,482
|
|
968
|
|
Decrease (increase) in
trade and other receivables, net
|
3,804
|
|
(12,925)
|
|
3,695
|
|
(22,213)
|
|
Decrease (increase) in
inventory, net of write off
|
(1,719)
|
|
402
|
|
5,330
|
|
(10,153)
|
|
Increase
(decrease) in trade payables and accrued liabilities
|
2,824
|
|
(3,831)
|
|
(7,413)
|
|
14,944
|
|
Increase in deferred
revenues
|
1,684
|
|
329
|
|
3,480
|
|
1,347
|
|
Decrease (increase) in
deferred tax asset, net
|
(62)
|
|
252
|
|
348
|
|
392
|
|
Other
adjustments
|
295
|
|
221
|
|
109
|
|
133
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) operating activities
|
$
15,521
|
|
$
(9,516)
|
|
$
24,073
|
|
$
534
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment
|
(2,276)
|
|
(3,980)
|
|
(6,233)
|
|
(7,485)
|
|
Purchase of intangible assets,
net
|
(1,488)
|
|
-
|
|
(2,824)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
$
(3,764)
|
|
$
(3,980)
|
|
$
(9,057)
|
|
$
(7,485)
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
share options exercise
|
189
|
|
40
|
|
563
|
|
229
|
|
Proceeds from
bank loans
|
-
|
|
15,800
|
|
-
|
|
6,800
|
|
Net cash
provided by financing activities
|
$
189
|
|
$
15,840
|
|
$
563
|
|
$
7,029
|
|
|
|
|
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
(22)
|
|
39
|
|
(134)
|
|
54
|
|
Increase in cash
and cash equivalents
|
$
11,924
|
|
$
2,383
|
|
$
15,445
|
|
$
132
|
|
Cash and cash
equivalents at the beginning of the period
|
29,398
|
|
34,087
|
|
25,877
|
|
36,338
|
|
Cash and cash
equivalents at the end of the period
|
$
41,322
|
|
$
36,470
|
|
$
41,322
|
|
$
36,470
|
|
|
|
|
|
|
|
|
|
|
|
Ceragon Reports
Third Quarter 2018 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
56,245
|
|
$
|
49,326
|
|
$
|
171,495
|
|
$
|
167,174
|
Amortization of
intangible assets
|
|
|
-
|
|
|
(310)
|
|
|
-
|
|
|
(919)
|
Stock based
compensation expenses
|
|
|
(15)
|
|
|
(10)
|
|
|
(33)
|
|
|
(42)
|
Changes in
pre-acquisition indirect tax positions
|
|
|
(11)
|
|
|
209
|
|
|
(38)
|
|
|
(118)
|
Non-GAAP cost
of revenues
|
|
$
|
|
56,219
|
|
$
|
49,215
|
|
$
|
171,424
|
|
$
|
166,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
|
30,284
|
|
$
|
26,673
|
|
$
|
86,637
|
|
$
|
78,180
|
Gross profit
adjustments
|
|
|
26
|
|
|
111
|
|
|
71
|
|
|
1,079
|
Non-GAAP gross
profit
|
|
$
|
|
30,310
|
|
$
|
26,784
|
|
$
|
86,708
|
|
$
|
79,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
|
|
7,436
|
|
$
|
6,975
|
|
$
|
21,471
|
|
$
|
19,210
|
Stock based
compensation expenses
|
|
|
(83)
|
|
|
(32)
|
|
|
(210)
|
|
|
(156)
|
Non-GAAP Research and
development expenses
|
|
$
|
|
7,353
|
|
$
|
6,943
|
|
$
|
21,261
|
|
$
|
19,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
|
|
10,510
|
|
$
|
9,543
|
|
$
|
31,441
|
|
$
|
29,319
|
Amortization of
intangible assets
|
|
|
-
|
|
|
(74)
|
|
|
-
|
|
|
(219)
|
Stock based
compensation expenses
|
|
|
(161)
|
|
|
(94)
|
|
|
(447)
|
|
|
(246)
|
Non-GAAP Sales and
Marketing expenses
|
|
$
|
|
10,349
|
|
$
|
9,375
|
|
$
|
30,994
|
|
$
|
28,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
|
|
4,438
|
|
$
|
4,462
|
|
$
|
14,087
|
|
$
|
14,032
|
Stock based
compensation expenses
|
|
|
(191)
|
|
|
(213)
|
|
|
(792)
|
|
|
(524)
|
Non-GAAP General and
Administrative expenses
|
|
$
|
|
4,247
|
|
$
|
4,249
|
|
$
|
13,295
|
|
$
|
13,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP financial
expenses
|
|
$
|
|
797
|
|
$
|
1,655
|
|
$
|
5,477
|
|
$
|
4,734
|
Recovery of
devaluation related expenses in Venezuela
|
|
|
969
|
|
|
-
|
|
|
969
|
|
|
-
|
Non-GAAP financial
expenses
|
|
$
|
1,766
|
|
$
|
1,655
|
|
$
|
6,446
|
|
$
|
4,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP taxes on
income
|
|
$
|
952
|
|
$
|
542
|
|
$
|
2,714
|
|
$
|
2,535
|
Other non-cash tax
adjustments
|
|
|
(58)
|
|
|
(340)
|
|
|
(526)
|
|
|
(625)
|
Non-GAAP taxes on
income
|
|
$
|
894
|
|
$
|
202
|
|
$
|
2,188
|
|
$
|
1,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceragon Reports
Third Quarter 2018 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
GAAP net
income
|
|
$
|
6,151
|
|
$
|
3,496
|
|
$
|
11,447
|
|
$
|
8,350
|
Amortization of
intangible assets
|
|
|
-
|
|
|
384
|
|
|
-
|
|
|
1,138
|
Stock based
compensation
expenses
|
|
|
450
|
|
|
349
|
|
|
1,482
|
|
|
968
|
Changes in
pre-acquisition tax
exposures
|
|
|
11
|
|
|
(209)
|
|
|
38
|
|
|
118
|
Recovery of
devaluation related
expenses in Venezuela
|
|
|
(969)
|
|
|
-
|
|
|
(969)
|
|
|
-
|
Non-cash tax
adjustments
|
|
|
58
|
|
|
340
|
|
|
526
|
|
|
625
|
Non-GAAP net
income
|
|
$
|
5,701
|
|
$
|
4,360
|
|
$
|
12,524
|
|
$
|
11,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic net income
per share
|
|
$
|
0.08
|
|
$
|
0.04
|
|
$
|
0.15
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
$
|
0.08
|
|
$
|
0.04
|
|
$
|
0.14
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and
diluted net
income per share
|
|
$
|
0.07
|
|
$
|
0.05
|
|
$
|
0.15
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing GAAP
basic net
income per share
|
|
|
78,455,128
|
|
|
77,964,433
|
|
|
78,256,060
|
|
|
77,885,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing
GAAP diluted net
income per share
|
|
|
81,172,392
|
|
|
79,596,845
|
|
|
80,696,365
|
|
|
80,105,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing
Non-GAAP diluted net
income per
share
|
|
|
81,546,013
|
|
|
79,880,400
|
|
|
81,027,179
|
|
|
80,347,262
|
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
5431163
|
|
tanyas@ceragon.com
|
|
View original
content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-third-quarter-2018-financial-results-300743754.html
SOURCE Ceragon Networks Ltd