LITTLE FALLS, New Jersey,
May 6, 2019 /PRNewswire/ -- Ceragon
Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul
specialist, today reported results for the first quarter ended
March 31, 2019.
First Quarter
2019 Highlights
Revenues - $69.2 million, down 16.9% from the first
quarter of 2018, and down 19.3% from the fourth quarter of
2018.
Gross margin - 35.6%, compared to 33.1% in the first
quarter of 2018 and 34.4% in the fourth quarter of 2018.
Operating income - $3.2 million, compared to
$5.4 million in the first quarter of
2018 and $6.5 million in the fourth
quarter of 2018.
Net income - net income of $0.8 million, or $0.01 per diluted share for the
first quarter of 2019. Net income for the first quarter of
2018 was $2.1 million, or
$0.03 per diluted share. Net income
for the fourth quarter of 2018 was $11.6
million or $0.14 per diluted
share.
Non-GAAP results - gross margin was 35.7%, operating
income was $3.7 million, and net income was
$2.1 million, or $0.03 per diluted share. For reconciliation of
GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents - $29.8
million at March 31, 2019,
compared to $35.6 million at
December 31, 2018.
"As we expected, first quarter results were low due to the
timing of large orders from India,
in addition to typical seasonal factors," said Ira Palti, president and CEO of Ceragon. "We
continue to experience a high level of customer activity around the
world resulting from the ongoing expansion of 4G and the beginning
of the transition to 5G. This high level of customer activity,
together with our expectation that we will receive a batch of large
orders in Q2 related to ongoing deployments in India, causes us to believe that our quarterly
revenue during the balance of 2019 is likely to be at or above the
high end of our $80 to $85 million quarterly revenue run rate. Thus, we
continue to expect overall revenue for 2019 to be similar to that
of 2018. We are also continuing to target in 2019 a 5th
consecutive year of growth in our non-GAAP net income, based on our
expectation to higher gross margin from a more favorable geographic
mix of revenue as well as lower financial expenses compared to
2018."
Supplemental revenue breakouts by geography:
First quarter 2019:
- Europe:
|
17%
|
- Africa:
|
13%
|
- North
America:
|
15%
|
- Latin
America:
|
22%
|
-
India:
|
15%
|
- 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) 230-1074 or International: +1
(612) 288-0329, 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:
https://www.ceragon.com/investors/webcasts/, and completing the
registration.
If you are unable to join us live, the replay numbers are:
USA: (800) 475-6701 or
International +1 (320) 365-3844 Access Code: 466180. A replay of
both the call and the webcast will be available through
June 6, 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=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 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 risks relating to the concentration of
a significant portion of Ceragon's business in certain geographic
regions and particularly in India,
where two customers currently represent a significant portion of
its revenues, risks associated with a decline in demand from the
single market segment on which we focus; risks associated with any
failure to effectively compete with other wireless equipment
providers; risk relating to certain guarantees granted by Ceragon
on behalf of Orocom to FITEL, in the framework of the FITEL
project; 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.
Investors:
Ran Vered
+972-3-543-1595
ranv@ceragon.com
or
Claudia Gatlin
+1-212 830-9080
claudiag@ceragon.com
Media:
Tanya
Solomon
+972-3-5431163
tanyas@ceragon.com
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(U.S. dollars in
thousands, except share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
Revenues
|
|
$
69,163
|
|
$
83,275
|
|
Cost of
revenues
|
|
44,531
|
|
55,671
|
|
|
|
|
|
|
|
Gross
profit
|
|
24,632
|
|
27,604
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
|
6,164
|
|
7,214
|
|
Selling and
marketing
|
|
9,462
|
|
10,562
|
|
General and
administrative
|
|
5,782
|
|
4,459
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
$
21,408
|
|
$
22,235
|
|
|
|
|
|
|
|
Operating
income
|
|
3,224
|
|
5,369
|
|
Financial expenses,
net
|
|
1,109
|
|
2,034
|
|
|
|
|
|
|
|
Income before
taxes
|
|
2,115
|
|
3,335
|
|
|
|
|
|
|
|
Taxes on
income
|
|
1,134
|
|
1,265
|
|
Equity loss in
affiliates
|
|
173
|
|
-
|
|
|
|
|
|
|
|
Net income
|
|
$
808
|
|
$
2,070
|
|
|
|
|
|
|
|
Basic net
income per share
|
|
$
0.01
|
|
$
0.03
|
|
Diluted net
income per share
|
|
$
0.01
|
|
$
0.03
|
|
|
|
|
|
|
|
Weighted average number
of shares used in
computing basic net income per share
|
|
80,113,607
|
|
78,080,146
|
|
|
|
|
|
|
|
Weighted average number
of shares used in
computing diluted net income per share
|
|
82,333,627
|
|
80,065,171
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
March
31,
|
|
December 31,
2018
|
2019
|
ASSETS
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash equivalents
|
|
$
29,754
|
|
$
35,581
|
Short - term bank deposits
|
|
-
|
|
515
|
Trade receivables,
net
|
|
119,548
|
|
123,451
|
Other accounts
receivable and prepaid expenses
|
|
12,555
|
|
12,135
|
Inventories
|
|
67,370
|
|
53,509
|
|
|
|
|
|
Total current
assets
|
|
229,227
|
|
225,191
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
Long-term bank
deposits
|
|
90
|
|
504
|
Deferred tax
assets
|
|
6,882
|
|
7,476
|
Severance pay
and pension fund
|
|
5,378
|
|
5,096
|
Property
and equipment, net
|
|
34,287
|
|
33,613
|
Intangible
assets, net
|
|
6,931
|
|
6,576
|
Other non-current
assets
|
|
14,722
|
|
4,544
|
|
|
|
|
|
Total non-current
assets
|
|
68,290
|
|
57,809
|
|
|
|
|
|
Total
assets
|
|
$
297,517
|
|
$
283,000
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
82,845
|
|
$
78,892
|
Deferred
revenues
|
|
4,246
|
|
3,873
|
Other accounts payable
and accrued expenses
|
|
29,281
|
|
27,256
|
|
|
|
|
|
Total current
liabilities
|
|
116,372
|
|
110,021
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Deferred tax
liability
|
|
24
|
|
28
|
Accrued severance pay
and pension
|
|
9,973
|
|
9,711
|
Other long term
payables
|
|
9,315
|
|
3,672
|
|
|
|
|
|
Total long-term
liabilities
|
|
19,312
|
|
13,411
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary
shares
|
|
214
|
|
214
|
Additional paid-in
capital
|
|
415,949
|
|
415,408
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
Other comprehensive
loss
|
|
(8,292)
|
|
(9,208)
|
Accumulated
deficits
|
|
(225,947)
|
|
(226,755)
|
|
|
|
|
|
Total shareholders'
equity
|
|
161,833
|
|
159,568
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
297,517
|
|
$
283,000
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2019
|
|
2018
|
Cash flow from
operating activities:
|
|
|
|
|
Net
Income
|
|
$
808
|
|
$
2,070
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
provided
by (used in) operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,120
|
|
1,511
|
Stock-based
compensation expense
|
|
475
|
|
353
|
Decrease (increase)
in trade and other receivables, net
|
|
(6,391)
|
|
183
|
Decrease (increase)
in inventory, net of write-off
|
|
(14,150)
|
|
4,488
|
Decrease in deferred
tax asset, net
|
|
590
|
|
474
|
Increase (decrease)
in trade payables and
accrued
|
|
15,583
|
|
(5,854)
|
liabilities
|
Increase in deferred
revenues
|
|
376
|
|
940
|
Other
adjustments
|
|
(31)
|
|
208
|
Net cash provided
by (used in) operating activities
|
$
(620)
|
|
$
4,373
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
Purchase of property
and equipment, net
|
|
(3,991)
|
|
(3,299)
|
Purchase of
intangible assets, net
|
|
(2,189)
|
|
(1,086)
|
Release of long and
short - term bank
|
|
940
|
|
-
|
deposit
|
Net cash used in
investing activities
|
|
$
(5,240)
|
|
$
(4,385)
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
Proceeds from
exercise of options
|
66
|
|
100
|
Net cash provided
by financing activities
|
|
$
66
|
|
$
100
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
$
(33)
|
|
$
(9)
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
$
(5,827)
|
|
$
79
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period
|
35,581
|
|
25,877
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
$
29,754
|
|
$
25,956
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands)
|
(Unaudited)
|
|
|
|
Three months
ended
|
March
31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
44,531
|
|
$
55,671
|
Stock based
compensation expenses
|
|
(15)
|
|
(17)
|
Changes in indirect
tax positions
|
|
(21)
|
|
(15)
|
Non-GAAP cost
of revenues
|
|
$
44,495
|
|
$
55,639
|
|
|
|
|
|
GAAP gross
profit
|
|
$
24,632
|
|
$
27,604
|
Gross profit
adjustments
|
|
36
|
|
32
|
Non-GAAP gross
profit
|
|
$
24,668
|
|
$
27,636
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
6,164
|
|
$
7,214
|
Stock based
compensation expenses
|
|
(103)
|
|
(60)
|
Non-GAAP Research and
development expenses
|
|
$
6,061
|
|
$
7,154
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
9,462
|
|
$
10,562
|
Stock based
compensation expenses
|
|
(175)
|
|
(144)
|
Non-GAAP Sales and
Marketing expenses
|
|
$
9,287
|
|
$
10,418
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
5,782
|
|
$
4,459
|
Stock based
compensation expenses
|
|
(182)
|
|
(132)
|
Non-GAAP General and
Administrative expenses
|
|
$
5,600
|
|
$
4,327
|
|
|
|
|
|
GAAP financial
expenses
|
|
$
1,109
|
|
$
2,034
|
Leases – financial
income (expenses)
|
|
26
|
|
-
|
Non-GAAP financial
expenses
|
|
$
1,135
|
|
$
2,034
|
|
|
|
|
|
GAAP taxes on
income
|
|
$
1,134
|
|
$
1,265
|
Non-cash tax
adjustments
|
|
(618)
|
|
(564)
|
Non-GAAP taxes on
income
|
|
$
516
|
|
$
701
|
|
|
|
|
|
GAAP equity loss in
affiliates
|
|
$
173
|
|
$
-
|
Other non-cash
adjustments
|
|
(173)
|
|
-
|
Non-GAAP equity loss
in affiliates
|
|
$
-
|
|
$
-
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
|
March
31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
GAAP net
income
|
|
$
808
|
|
$
2,070
|
Stock based
compensation expenses
|
|
475
|
|
353
|
Changes in indirect
tax positions
|
|
21
|
|
15
|
Leases – financial
expenses (income)
|
|
(26)
|
|
-
|
Non-cash tax
adjustment
|
|
618
|
|
564
|
Other non-cash
adjustment
|
|
173
|
|
-
|
|
|
$
2,069
|
|
$
3,002
|
Non-GAAP net
income
|
|
|
$
0.01
|
|
$
0.03
|
GAAP basic net income
per share
|
|
|
$
0.01
|
|
$
0.03
|
GAAP diluted net
income per share
|
|
|
$
0.03
|
|
$
0.04
|
Non-GAAP basic and
diluted net income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
|
|
|
|
|
GAAP basic net income
per share
|
|
80,113,607
|
|
78,080,146
|
|
|
82,333,627
|
|
80,065,171
|
Weighted average
number of shares used in
computing
|
GAAP diluted net income per
share
|
|
|
|
|
|
Weighted average
number of shares used in computing
Non-GAAP basic and diluted net income
per share
|
82,701,755
|
|
80,377,797
|
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SOURCE Ceragon Networks Ltd