LITTLE FALLS, New Jersey,
Aug. 12, 2019 /PRNewswire/ -- Ceragon
Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist
today reported results for the second quarter which ended
June 30, 2019.
Second Quarter 2019 Highlights:
Revenues - $73.0 million,
down 17.4% from the second quarter of 2018, and up 5.5% from the
first quarter of 2019.
Gross margin – 36.1%, compared
to 32.5% in the second quarter of
2018 and 35.6% in the first
quarter of 2019.
Operating income - $4.1
million, compared to $6.4 million in the
second quarter of 2018, and
$3.2 million in the first quarter of
2019.
Net income - $0.8 million,
or $0.01 per diluted share for the
second quarter of 2019, compared to $3.2
million, or $0.04 per diluted
share, in the second quarter of 2018. Net income for the first
quarter of 2019 was $0.8 million, or
$0.01 per diluted share.
Non-GAAP results – Gross margin was 36.1%, operating
income was $4.8 million, and net
income was $2.5 million, or
$0.03 per diluted share. For
reconciliation of GAAP to non-GAAP results, see the attached
tables.
Cash and cash equivalents - $29.0
million at June 30, 2019,
compared to $29.8 million at
March 31, 2019.
"Growth in several regions accounted for the sequential increase
in revenue during the second quarter, although the overall revenue
level continued to reflect the delay in receiving orders from our
customers in India," said
Ira Palti, president and CEO of
Ceragon. "We are pleased to report that, during Q2, we added new
design wins for 5G in North
America, Europe, and
Asia Pacific which we expect to
begin contributing to revenue during the second half of next
year.
"Excluding India, revenue from other regions increased
substantially in the first half of 2019 compared to the first half
of 2018, and we expect to see this trend continue. Looking to
the second half of 2019, it now appears that our revenue from
India will be affected not only by
the order delays but also by a slowdown in the pace of deployment
activity, preventing us from reaching our net income goal and
causing net income for 2019 to decline compared to 2018," Mr. Palti
explained.
Supplemental geographical breakdown of revenue for the second
quarter of 2019:
·
Europe:
|
13%
|
·
Africa:
|
11%
|
· North
America:
|
20%
|
· Latin
America:
|
28%
|
·
India:
|
10%
|
·
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) 230-1085 or International: +1 (612)
288-0340, 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 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: 469750. A replay of
both the call and the webcast will be available through
September 12, 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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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: 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
Second Quarter 2019 Results
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
Three months
ended June
30,
|
|
Six months
ended June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
73,001
|
|
$
|
88,328
|
|
$
|
142,164
|
|
$
|
171,603
|
Cost of
revenues
|
|
|
46,640
|
|
|
59,579
|
|
|
91,171
|
|
|
115,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
26,361
|
|
|
28,749
|
|
|
50,993
|
|
|
56,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
|
6,254
|
|
|
6,821
|
|
|
12,418
|
|
|
14,035
|
Selling and
marketing
|
|
|
10,121
|
|
|
10,369
|
|
|
19,583
|
|
|
20,931
|
General and
administrative
|
|
|
5,854
|
|
|
5,190
|
|
|
11,636
|
|
|
9,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
$
|
22,229
|
|
$
|
22,380
|
|
$
|
43,637
|
|
$
|
44,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
4,132
|
|
|
6,369
|
|
|
7,356
|
|
|
11,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
|
1,830
|
|
|
2,646
|
|
|
2,939
|
|
|
4,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
|
2,302
|
|
|
3,723
|
|
|
4,417
|
|
|
7,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
|
|
1,398
|
|
|
497
|
|
|
2,532
|
|
|
1,762
|
Equity loss in
affiliates
|
|
|
141
|
|
|
-
|
|
|
314
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
763
|
|
$
|
3,226
|
|
$
|
1,571
|
|
$
|
5,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
|
0.01
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.07
|
Diluted net income per
share
|
|
$
|
0.01
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing basic net
income
per share
|
|
|
80,192,036
|
|
|
78,231,726
|
|
|
80,153,038
|
|
|
78,155,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares
used in computing diluted net
income per share
|
|
|
82,051,028
|
|
|
80,850,353
|
|
|
82,192,544
|
|
|
80,457,636
|
Ceragon Reports
Second Quarter 2019 Results
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
June
30, 2019
|
|
December 31,
2018
|
ASSETS
|
|
|
Unaudited
|
|
|
Audited
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
29,041
|
|
$
|
35,581
|
Short - term bank
deposits
|
|
|
-
|
|
|
515
|
Trade receivables,
net
|
|
|
121,449
|
|
|
123,451
|
Other accounts
receivable and prepaid expenses
|
|
|
13,783
|
|
|
12,135
|
Inventories
|
|
|
73,900
|
|
|
53,509
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
238,173
|
|
|
225,191
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
|
|
Long-term bank
deposits
|
|
|
29
|
|
|
504
|
Deferred tax
assets
|
|
|
6,236
|
|
|
7,476
|
Severance
pay and pension fund
|
|
|
5,574
|
|
|
5,096
|
Property
and equipment, net
|
|
|
35,009
|
|
|
33,613
|
Intangible
assets, net
|
|
|
7,670
|
|
|
6,576
|
Other non-current
assets
|
|
|
15,822
|
|
|
4,544
|
|
|
|
|
|
|
|
Total non-current
assets
|
|
|
70,340
|
|
|
57,809
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
308,513
|
|
$
|
283,000
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
79,431
|
|
$
|
78,892
|
Deferred
revenues
|
|
|
3,770
|
|
|
3,873
|
Short- term
loans
|
|
|
8,900
|
|
|
-
|
Other accounts payable
and accrued expenses
|
|
|
26,385
|
|
|
27,256
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
118,486
|
|
|
110,021
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
|
Deferred tax
liability
|
|
|
24
|
|
|
28
|
Accrued severance pay
and pension
|
|
|
10,053
|
|
|
9,711
|
Deferred
revenues
|
|
|
6,265
|
|
|
-
|
Other long-term
payables
|
|
|
9,926
|
|
|
3,672
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
|
26,268
|
|
|
13,411
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
|
Share
capital:
|
|
|
|
|
|
|
Ordinary shares
|
|
|
215
|
|
|
214
|
Additional paid-in
capital
|
|
|
416,835
|
|
|
415,408
|
Treasury shares at
cost
|
|
|
(20,091)
|
|
|
(20,091)
|
Other comprehensive
loss
|
|
|
(8,016)
|
|
|
(9,208)
|
Accumulated
deficits
|
|
|
(225,184)
|
|
|
(226,755)
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
163,759
|
|
|
159,568
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
308,513
|
|
$
|
283,000
|
Ceragon Reports
Second Quarter 2019 Results
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
|
|
Three months
ended June
30,
|
|
|
Six months
ended June
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
763
|
|
$
|
3,226
|
|
$
|
1,571
|
|
$
|
5,296
|
Adjustments to
reconcile net income to
net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,318
|
|
|
1,990
|
|
|
4,438
|
|
|
3,501
|
Stock-based
compensation expense
|
|
|
697
|
|
|
679
|
|
|
1,172
|
|
|
1,032
|
Increase in trade and
other receivables,
net
|
|
|
(3,797)
|
|
|
(292)
|
|
|
(10,188)
|
|
|
(109)
|
Decrease (increase) in
inventory, net of
write off
|
|
|
(6,663)
|
|
|
2,561
|
|
|
(20,813)
|
|
|
7,049
|
Decrease (increase) in
deferred tax asset,
net
|
|
|
646
|
|
|
(64)
|
|
|
1,236
|
|
|
410
|
Increase
(decrease) in trade payables and accrued liabilities
|
|
|
(6,120)
|
|
|
(4,383)
|
|
|
9,463
|
|
|
(10,237)
|
Increase in long and
short – term deferred
revenues
|
|
|
5,774
|
|
|
856
|
|
|
6,150
|
|
|
1,796
|
Other
adjustments
|
|
|
(105)
|
|
|
(394)
|
|
|
(136)
|
|
|
(186)
|
Net cash provided
by (used in) operating
activities
|
|
$
|
(6,487)
|
|
$
|
4,179
|
|
$
|
(7,107)
|
|
$
|
8,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment, net
|
|
|
(2,716)
|
|
|
(658)
|
|
|
(6,707)
|
|
|
(3,957)
|
Purchase of intangible
assets, net
|
|
|
(603)
|
|
|
(250)
|
|
|
(2,792)
|
|
|
(1,336)
|
Release
(purchase) of long and short –
term bank deposit
|
|
|
(20)
|
|
|
-
|
|
|
920
|
|
|
-
|
Net cash used in
investing activities
|
|
$
|
(3,339)
|
|
$
|
(908)
|
|
$
|
(8,579)
|
|
$
|
(5,293)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from share
options exercise
|
|
|
190
|
|
|
274
|
|
|
256
|
|
|
374
|
Proceeds of short-term
bank credits and
loans, net
|
|
|
8,900
|
|
|
-
|
|
|
8,900
|
|
|
-
|
Net cash
provided by financing activities
|
|
$
|
9,090
|
|
$
|
274
|
|
$
|
9,156
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation
adjustments on cash and
cash equivalents
|
|
$
|
23
|
|
$
|
(103)
|
|
$
|
(10)
|
|
$
|
(112)
|
Increase
(decrease) in cash and cash
equivalents
|
|
$
|
(713)
|
|
$
|
3,442
|
|
$
|
(6,540)
|
|
$
|
3,521
|
Cash and cash
equivalents at the beginning
of the period
|
|
|
29,754
|
|
|
25,956
|
|
|
35,581
|
|
|
25,877
|
Cash and cash
equivalents at the end of
the period
|
|
$
|
29,041
|
|
$
|
29,398
|
|
$
|
29,041
|
|
$
|
29,398
|
|
|
|
|
|
|
|
|
|
Ceragon Reports
Second Quarter 2019 Results
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
46,640
|
|
$
|
59,579
|
|
$
|
91,171
|
|
$
|
115,250
|
Stock based
compensation expenses
|
|
|
(16)
|
|
|
(1)
|
|
|
(31)
|
|
|
(18)
|
Changes in indirect
tax positions
|
|
|
(9)
|
|
|
(12)
|
|
|
(30)
|
|
|
(27)
|
Non-GAAP cost
of revenues
|
|
$
|
46,615
|
|
$
|
59,566
|
|
$
|
91,110
|
|
$
|
115,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
26,361
|
|
$
|
28,749
|
|
$
|
50,993
|
|
$
|
56,353
|
Gross profit
adjustments
|
|
|
25
|
|
|
13
|
|
|
61
|
|
|
45
|
Non-GAAP gross
profit
|
|
$
|
26,386
|
|
$
|
28,762
|
|
$
|
51,054
|
|
$
|
56,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
|
6,254
|
|
$
|
6,821
|
|
$
|
12,418
|
|
$
|
14,035
|
Stock based
compensation expenses
|
|
|
(98)
|
|
|
(67)
|
|
|
(201)
|
|
|
(127)
|
Non-GAAP Research and
development expenses
|
|
$
|
6,156
|
|
$
|
6,754
|
|
$
|
12,217
|
|
$
|
13,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
|
10,121
|
|
$
|
10,369
|
|
$
|
19,583
|
|
$
|
20,931
|
Stock based
compensation expenses
|
|
|
(207)
|
|
|
(142)
|
|
|
(382)
|
|
|
(286)
|
Non-GAAP Sales and
Marketing expenses
|
|
$
|
9,914
|
|
$
|
10,227
|
|
$
|
19,201
|
|
$
|
20,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
|
5,854
|
|
$
|
5,190
|
|
$
|
11,636
|
|
$
|
9,649
|
Stock based
compensation expenses
|
|
|
(376)
|
|
|
(469)
|
|
|
(558)
|
|
|
(601)
|
Non-GAAP General and
Administrative expenses
|
|
$
|
5,478
|
|
$
|
4,721
|
|
$
|
11,078
|
|
$
|
9,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP financial
expenses
|
|
$
|
1,830
|
|
$
|
2,646
|
|
$
|
2,939
|
|
$
|
4,680
|
Leases – financial
income (expenses)
|
|
|
(218)
|
|
|
-
|
|
|
(192)
|
|
|
-
|
Non-GAAP financial
expenses
|
|
$
|
1,612
|
|
$
|
2,646
|
|
$
|
2,747
|
|
$
|
4,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Tax
expenses
|
|
$
|
1,398
|
|
$
|
497
|
|
$
|
2,532
|
|
$
|
1,762
|
Non cash tax
adjustments
|
|
|
(654)
|
|
|
96
|
|
|
(1,272)
|
|
|
(468)
|
Non-GAAP Tax
expenses
|
|
$
|
744
|
|
$
|
593
|
|
$
|
1,260
|
|
$
|
1,294
|
GAAP equity loss in
affiliates
|
|
$
|
141
|
|
$
|
-
|
|
$
|
314
|
|
|
-
|
Other non-cash
adjustments
|
|
|
(141)
|
|
|
-
|
|
|
(314)
|
|
$
|
-
|
Non-GAAP equity loss
in affiliates
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
Ceragon Reports
Second 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,
June
30,
|
|
Six months
ended, June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
GAAP net
income
|
|
$
|
763
|
|
$
|
3,226
|
|
$
|
1,571
|
|
$
|
5,296
|
Stock based
compensation
expenses
|
|
|
697
|
|
|
679
|
|
|
1,172
|
|
|
1,032
|
Changes in indirect
tax positions
|
|
|
9
|
|
|
12
|
|
|
30
|
|
|
27
|
Leases – financial
expenses
(income)
|
|
|
218
|
|
|
-
|
|
|
192
|
|
|
-
|
Non-cash tax
adjustments
|
|
|
654
|
|
|
(96)
|
|
|
1,272
|
|
|
468
|
Other non-cash
adjustment
|
|
|
141
|
|
|
-
|
|
|
314
|
|
|
-
|
Non-GAAP net
income
|
|
$
|
2,482
|
|
$
|
3,821
|
|
$
|
4,551
|
|
$
|
6,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic net income
per share
|
|
$
|
0.01
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
$
|
0.01
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.07
|
Non-GAAP basic and
diluted net
income per share
|
|
$
|
0.03
|
|
$
|
0.05
|
|
$
|
0.06
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing GAAP
basic net income per share
|
|
|
80,192,036
|
|
|
78,231,726
|
|
|
80,153,038
|
|
|
78,155,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing GAAP
diluted net income per share
|
|
|
82,051,028
|
|
|
80,850,353
|
|
|
82,192,544
|
|
|
80,457,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in computing
Non-GAAP diluted net income per
share
|
|
|
82,249,605
|
|
|
81,156,546
|
|
|
82,475,897
|
|
|
80,767,046
|
Investors:
Ran
Vered
+972-3-543-1595
ranv@ceragon.com
Media:
Tanya
Solomon
+972-3-5431163
tanyas@ceragon.com
View original
content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-second-quarter-2019-financial-results-300899853.html
SOURCE Ceragon Networks Ltd