Ceragon Networks Reports First Quarter 2019 Financial Results

Date : 05/06/2019 @ 12:00PM
Source : PR Newswire (US)
Stock : Ceragon Networks Ltd. - Ordinary Shares (MM) (CRNT)
Quote : 2.9501  0.0601 (2.08%) @ 3:28PM

Ceragon Networks Reports First Quarter 2019 Financial Results

Ceragon (NASDAQ:CRNT)
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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

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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 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

 

 

Cision View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-first-quarter-2019-financial-results-300844104.html

SOURCE Ceragon Networks Ltd

Copyright 2019 PR Newswire

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