RICHARDSON, Texas, May 2, 2022 /PRNewswire/ --
Q1 2022 Financial Highlights:
- Revenues of $70.3
million
- Operating loss of $(1.3)
million on a GAAP basis, or $(0.6)
million on a non-GAAP basis
- EPS of $(0.03) per diluted
share on a GAAP basis, or $(0.02) per
diluted share on a non-GAAP basis
Q1 2022 Business Highlights:
- Strong bookings in North
America, India,
Europe and LATAM
- Book to bill for the trailing 12 months is above 1
- North
America:
- Current outlook
suggests another record year
-
Acquired new 5G customers including DISH and private
networks
- Europe:
-
Record quarter surpassing the last two years in terms of
bookings
- Leading Tier 1 operator
tested Ceragon's RAON software with a third-party DCSG; results
show RAON works well with other open network
elements
- Successful POC with a
Tier1 global operator as part of their TIP
activity
- Acquired a Tier 2
customer; supporting their nationwide 5G projects
- India:
- Continued
strong demand for site upgrades and network expansions to prepare
for 5G
- Leading Tier 1 operator
placed orders for our all-outdoor 5G-ready multicore solution, with
delivery scheduled for Q2 and Q3 2022
- LATAM:
- Very
strong start to the year with strong
bookings
- Received POs for IP50
FX from leading Tier 1 operators in Paraguay and Argentina
Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator
and leading solutions provider of 5G wireless transport, today
reported its financial results for the first quarter ended
March 31, 2022.
Doron Arazi, CEO,
commented: "We began the year with accelerated momentum
reflected by very strong bookings in Q1. We are witnessing
increased operator and private network activity, especially in
terms of 5G deployments in North
America and Europe. While
we are successfully turning this new momentum into new customers,
orders, and bookings, the global component shortage, supply chain
disruptions, and shipping issues continue to create irregular
volatilities in our industry and adversely impact the conversion of
our business successes into revenue increase and healthy margins.
We are taking measures to mitigate this impact and its effects. We
continue to be laser-focused on the areas that add value to our
business, such as our technological leadership in our core domain
and in the open network market, as well as our growing Managed
Services offering."
Primary First Quarter 2022 Financial
Results:
Revenues were $70.3
million, up 2.9% from $68.3
million in Q1 2021 and down 9.6% from $77.8 million in Q4 2021. Revenues were generally
in line with the effect of the challenges we experienced in each
region, which involved delay in delivering some of our products on
time due to component shortages and supply chain disruptions.
Gross profit was $19.3
million, giving us a gross margin of 27.5%, compared with a
gross margin of 29.5 % in Q1 2021 and 29.4% in Q4 2021. The
relatively low gross profit is mainly due to expedite costs and
price increase derived from component shortages and increased
shipping costs.
Operating income (loss) was $(1.3)
million compared with operating income of $0.4 million for Q1 2021 and $1.0 million for Q4 2021.
Net loss was $(2.3)
million, or $(0.03) per
diluted share compared with $(1.2)
million, or $(0.01) per
diluted share for Q1 2021 and $(12.2)
million, or $(0.15) per
diluted share for Q4 2021.
Non-GAAP results were as follows: Gross margin was 27.7%,
operating loss was $(0.6) million,
and net loss was $(1.9) million, or
$(0.02) per diluted share.
Cash and cash equivalents was $25.0 million at March 31,
2022, compared to $17.1
million at December 31,
2021.
For a reconciliation of GAAP to non-GAAP results, see the
attached tables.
Revenue Breakouts by Geography:
|
Q1
2022
|
India
|
22%
|
Europe
|
17%
|
North
America
|
19%
|
Latin
America
|
20%
|
APAC
|
14%
|
Africa
|
8%
|
Outlook
We continue to target revenue growth in 2022. Assuming an
improvement in the components, supply chain and shipping drawbacks,
we now expect yearly revenue to be between $300-$315 million.
Improvement in our gross margin is expected only during the second
half of the year, assuming gradual improvement in our supply chain
and shipping constrains and costs.
Conference Call
The Company will host a Zoom web conference today at
9:00a.m. ET to discuss the results,
followed by a question and answer session for the investment
community.
Investors are invited to register by clicking the following
link. All relevant information will be sent upon registration.
If you are unable to join us live, a recording of the call will
be available on our website at www.ceragon.com within 24 hours
after the call.
About Ceragon Networks
Ceragon Networks Ltd. (NASDAQ: CRNT) is the global
innovator and leading solutions provider of 5G wireless transport.
We help operators and other service providers worldwide increase
operational efficiency and enhance end customers' quality of
experience with innovative wireless backhaul and fronthaul
solutions. Our customers include service providers, public safety
organizations, government agencies and utility companies, which use
our solutions to deliver 5G & 4G broadband wireless
connectivity, mission-critical multimedia services, stabilized
communications, and other applications at high reliability and
speed.
Ceragon's unique multicore technology and disaggregated approach
to wireless transport provides highly reliable, fast to deploy,
high-capacity wireless transport for 5G and 4G networks with
minimal use of spectrum, power, real estate, and labor resources.
It enables increased productivity, as well as simple and quick
network modernization, positioning Ceragon as a leading solutions
provider for the 5G era. We deliver a complete portfolio of turnkey
end-to-end AI-based managed and professional services that ensure
efficient network rollout and optimization to achieve the highest
value for our customers. Our solutions are deployed by more than
400 service providers, as well as more than 800 private network
owners, in more than 150 countries. For more information please
visit: www.ceragon.com
Safe Harbor
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 that constitute
"forward-looking statements" within the meaning of the Securities
Act of 1933, as amended and the Securities Exchange Act of 1934, as
amended, and the safe-harbor provisions of 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 about Ceragon's business, financial condition,
results of operations, micro and macro market trends and other
issues addressed or reflected therein. Examples of forward-looking
statements include, but are not limited to, statements regarding:
projections of demand, revenues, net income, gross margin, capital
expenditures and liquidity, competitive pressures, order timing,
supply chain and shipping, components availability, growth
prospects, product development, financial resources, cost savings
and other financial and market 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, although not all forward-looking
statements contain these identifying words.
Although we believe that the projections reflected in such
forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be obtained or
that any deviations therefrom will not be material. Such
forward-looking statements involve known and unknown risks and
uncertainties that may cause Ceragon's future results or
performance to differ materially from those anticipated, expressed
or implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, the continuing
impact of the components shortage due to the global shortage in
semiconductors, chipsets, components and other commodities, on our
supply chain, manufacturing capacity and ability to timely deliver
our products, which have caused, and could continue to cause delays
in deliveries of our products and in the deployment of
projects by our customers, risk of penalties and orders
cancellation created thereby, as well as profit erosion due to
constant price increase, payment of expedite fees and costs of
inventory pre-ordering and procurement acceleration of such
inventory, and the risk of becoming a deadstock if not consumed;
the continued effect of the global increase in shipping costs and
decrease in shipping slots availability on us, our supply chain and
customers, which have resulted, and may continue to result in,
price erosion, late deliveries and the risk of penalties and orders
cancellation due to late deliveries; the impact of the transition
to 5G technologies on our revenues if such transition is developed
differently than we anticipated; the risks relating to the
concentration of a major portion of our business on large mobile
operators around the world from which we derive a significant
portion of our ordering, that due to their relative effect on the
overall ordering coupled with inconsistent ordering pattern and
volume of business directed to us, creates high volatility with
respect to our financial results and results of operations; the
effect of the competition from other wireless transport equipment
providers and from other communication solutions that compete with
our high-capacity point-to-point wireless products; the continued
effect of the COVID-19 pandemic on the global economy and markets
and on us and on the markets in which we operate and our and our
customers, providers, business partners and contractors business
and operations; the risks relating to increased breaches of network
or information technology security along with increase in
cyber-attack activities, growing cyber-crime threats, and changes
in privacy and data protection laws, that could have an adverse
effect on our business; risks associated with any failure to meet
our product development timetable, including delay in the
commercialization of our new chipset; imposition of additional
sanctions and global trade limitations in connection with
Russia's invasion to Ukraine, the effects of general economic
conditions and trends on the global and local markets in which we
operate and such other risks, uncertainties and other factors that
could affect our results, as further detailed in Ceragon's most
recent Annual Report on Form 20-F and in Ceragon's other filings
with the Securities and Exchange Commission.
Such forward-looking statements, including the risks,
uncertainties and other factors that could affect our results,
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. Such forward-looking statements do not purport to be
predictions of future events or results and there can be no
assurance that it will prove to be accurate. Ceragon may elect to
update these forward-looking statements at some point in the future
but the company specifically disclaims any obligation to do so
except as may be required by law.
Ceragon's public filings are available on the Securities and
Exchange Commission's website at www.sec.gov and may also be
obtained from Ceragon's website at
www.ceragon.com.
Investor & Media Contact:
Maya Lustig
Ceragon Networks
Tel. +972-54-677-8100
mayal@ceragon.com
-Tables Follow-
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended March
31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
70,319
|
|
$
68,270
|
|
Cost of
revenues
|
|
50,982
|
|
48,124
|
|
|
|
|
|
|
|
Gross profit
|
|
19,337
|
|
20,146
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research
and development, net
|
|
6,765
|
|
7,410
|
|
Sales and
marketing
|
|
8,772
|
|
8,290
|
|
General
and administrative
|
|
5,058
|
|
4,093
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
$
20,595
|
|
$
19,793
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(1,258)
|
|
353
|
|
|
|
|
|
|
|
Financial expenses and
others, net
|
|
759
|
|
1,051
|
|
|
|
|
|
|
|
Loss before
taxes
|
|
(2,017)
|
|
(698)
|
|
|
|
|
|
|
|
Taxes on
income
|
|
271
|
|
475
|
|
|
|
|
|
|
|
Net loss
|
|
$
(2,288)
|
|
$
(1,173)
|
|
|
|
|
|
|
|
Basic net loss per
share
|
|
$
(0.03)
|
|
$
(0.01)
|
|
Diluted net loss per
share
|
|
$
(0.03)
|
|
$
(0.01)
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
basic net loss per share
|
|
83,959,261
|
|
82,583,760
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
diluted net loss per share
|
|
83,959,261
|
|
82,583,760
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
March
31, 2022
|
|
December
31, 2021
|
ASSETS
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
24,960
|
|
$
17,079
|
Trade
receivables, net
|
|
112,820
|
|
107,826
|
Other
accounts receivable and prepaid expenses
|
|
17,273
|
|
17,179
|
Inventories
|
|
58,060
|
|
61,398
|
|
|
|
|
|
Total current
assets
|
|
213,113
|
|
203,482
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
Trade
receivables, net
|
|
7,862
|
|
10,484
|
Severance
pay and pension fund
|
|
5,490
|
|
5,648
|
Property
and equipment, net
|
|
29,334
|
|
29,383
|
Operating
lease right-of-use assets
|
|
19,496
|
|
20,233
|
Intangible
assets, net
|
|
6,550
|
|
6,274
|
Other
non-current assets
|
|
18,342
|
|
17,059
|
|
|
|
|
|
Total non-current
assets
|
|
87,074
|
|
89,081
|
|
|
|
|
|
Total assets
|
|
$
300,187
|
|
$
292,563
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
67,908
|
|
$
69,436
|
Deferred
revenues
|
|
3,356
|
|
3,384
|
Short-term
loans
|
|
26,950
|
|
14,800
|
Operating
lease liabilities
|
|
4,156
|
|
4,359
|
Other
accounts payable and accrued expenses
|
|
23,249
|
|
23,704
|
|
|
|
|
|
Total current
liabilities
|
|
125,619
|
|
115,683
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Accrued
severance pay and pension
|
|
10,569
|
|
10,799
|
Deferred
revenues
|
|
9,395
|
|
9,275
|
Other
long-term payables
|
|
2,497
|
|
2,445
|
Operating
lease liabilities
|
|
16,251
|
|
17,210
|
|
|
|
|
|
Total long-term
liabilities
|
|
38,712
|
|
39,729
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary
shares
|
|
224
|
|
224
|
Additional
paid-in capital
|
|
429,071
|
|
428,244
|
Treasury
shares at cost
|
|
(20,091)
|
|
(20,091)
|
Other
comprehensive loss
|
|
(9,341)
|
|
(9,507)
|
Accumulated deficits
|
|
(264,007)
|
|
(261,719)
|
|
|
|
|
|
Total shareholders'
equity
|
|
135,856
|
|
137,151
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
300,187
|
|
$
292,563
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
Three months
ended
March
31,
|
|
|
2022
|
|
2021
|
|
Cash flow from
operating activities:
|
|
|
|
|
Net loss
|
$
(2,288)
|
|
$
(1,173)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
2,941
|
|
2,886
|
|
Loss (gain) from sale
of property and equipment, net
|
18
|
|
(128)
|
|
Share-based
compensation
|
746
|
|
351
|
|
Decrease in accrued
severance pay and pensions, net
|
(73)
|
|
(203)
|
|
Decrease (increase) in
trade receivables, net
|
(1,564)
|
|
413
|
|
Increase in other
accounts receivable and prepaid expenses
(including other long term assets)
|
(1,778)
|
|
(1,092)
|
|
Decrease in operating
lease right-of-use assets
|
981
|
|
1,269
|
|
Decrease in
inventories, net of write off
|
3,551
|
|
1,718
|
|
Decrease in deferred
tax asset, net
|
-
|
|
10
|
|
Decrease in trade
payables
|
(1,764)
|
|
(2,131)
|
|
Decrease in other
accounts payable and accrued expenses
(including other long term liabilities)
|
(1,273)
|
|
(3,656)
|
|
Decrease in operating
lease liability
|
(1,405)
|
|
(1,455)
|
|
Increase in deferred
revenues
|
92
|
|
1,537
|
|
Net cash used in
operating activities
|
$
(1,816)
|
|
$
(1,654)
|
|
Cash flow from
investing activities:
|
|
|
|
|
Purchase of property
and equipment
|
(2,523)
|
|
(2,203)
|
|
Proceeds from sale of
property and equipment
|
-
|
|
200
|
|
Purchase of intangible
assets
|
(203)
|
|
-
|
|
Net cash used in
investing activities
|
$
(2,726)
|
|
$
(2,003)
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
Proceeds from exercise
of stock options
|
81
|
|
3,689
|
|
Proceeds from bank
credits and loans, net
|
12,150
|
|
6,000
|
|
Net cash
provided by financing activities
|
$
12,231
|
|
$
9,689
|
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
$
192
|
|
$
(122)
|
|
Increase in cash and
cash equivalents
|
$
7,881
|
|
$
5,910
|
|
Cash and cash
equivalents at the beginning of the period
|
17,079
|
|
27,101
|
|
Cash and cash
equivalents at the end of the period
|
$
24,960
|
|
$
33,011
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands)
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
50,982
|
|
$
|
48,124
|
|
Stock based
compensation
|
|
|
(132)
|
|
|
(36)
|
|
Changes in indirect tax
positions
|
|
|
-
|
|
|
(1)
|
|
Non-GAAP cost
of revenues
|
|
$
|
50,850
|
|
$
|
48,087
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
19,337
|
|
$
|
20,146
|
|
Stock based
compensation
|
|
|
132
|
|
|
36
|
|
Changes in indirect tax
positions
|
|
|
-
|
|
|
1
|
|
Non-GAAP gross
profit
|
|
$
|
19,469
|
|
$
|
20,183
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
|
6,765
|
|
$
|
7,410
|
|
Stock based
compensation
|
|
|
14
|
|
|
(52)
|
|
Non-GAAP Research and
development expenses
|
|
$
|
6,779
|
|
$
|
7,358
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
|
8,772
|
|
$
|
8,290
|
|
Stock based
compensation
|
|
|
(277)
|
|
|
(104)
|
|
Non-GAAP Sales and
Marketing expenses
|
|
$
|
8,495
|
|
$
|
8,186
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
|
5,058
|
|
$
|
4,093
|
|
Retired CEO
compensation
|
|
|
96
|
|
|
-
|
|
Stock based
compensation
|
|
|
(351)
|
|
|
(159)
|
|
Non-GAAP General and
Administrative expenses
|
|
$
|
4,803
|
|
$
|
3,934
|
|
GAAP operating income
(loss)
|
|
$
|
(1,258)
|
|
$
|
353
|
|
Stock based
compensation
|
|
|
746
|
|
|
351
|
|
Changes in indirect tax
positions
|
|
|
-
|
|
|
1
|
|
Retired CEO
compensation
|
|
|
(96)
|
|
|
-
|
|
Non-GAAP operating
income (loss)
|
|
$
|
(608)
|
|
$
|
705
|
|
GAAP financial expenses
and others, net
|
|
$
|
759
|
|
$
|
1,051
|
|
Leases – financial
income
|
|
|
425
|
|
|
186
|
|
Non-GAAP financial
expenses and others, net
|
|
$
|
1,184
|
|
$
|
1,237
|
|
|
|
|
|
|
|
|
|
GAAP Tax
expenses
|
|
$
|
271
|
|
$
|
475
|
|
Non cash tax
adjustments
|
|
|
(210)
|
|
|
(128)
|
|
Non-GAAP Tax
expenses
|
|
$
|
61
|
|
$
|
347
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(2,288)
|
|
$
|
(1,173)
|
|
|
|
Stock based
compensation
|
|
|
746
|
|
|
351
|
|
|
|
Changes in
indirect tax positions
|
|
|
-
|
|
|
1
|
|
|
|
Leases –
financial income
|
|
|
(425)
|
|
|
(186)
|
|
|
|
Retired
CEO compensation
|
|
|
(96)
|
|
|
-
|
|
|
|
Non-cash
tax adjustments
|
|
|
210
|
|
|
128
|
|
|
|
Non-GAAP net
loss
|
|
$
|
(1,853)
|
|
$
|
(879)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and diluted
net loss per share
|
|
$
|
(0.03)
|
|
$
|
(0.01)
|
|
|
|
Non-GAAP diluted net
loss per share
|
|
$
|
(0.02)
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
GAAP basic and diluted net loss per share
|
|
|
83,959,261
|
|
|
82,583,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
Non-GAAP diluted net loss per share
|
|
|
83,959,261
|
|
|
82,583,760
|
|
|
View original
content:https://www.prnewswire.com/news-releases/ceragon-networks-reports-first-quarter-2022-financial-results-301537112.html
SOURCE Ceragon Networks Ltd.