Company Delivers $83.4 Million
in Revenue and Improved GAAP and Non-GAAP Net Income as Market
Demand Continues to be Strong
ROSH
HA'AIN, Israel,
May 1,
2023 /PRNewswire/ -- 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,
2023.
Q1 2023 Financial Highlights:
- Revenues of $83.4
million
- Operating income of $4.7
million on a GAAP basis, or $5.9
million on a non-GAAP basis
- EPS of $0.02 per diluted share
on a GAAP basis, or $0.04 per diluted
share on a non-GAAP basis
Q1 2023 Business Highlights:
- Book-to-bill above 1 on a quarterly and trailing 12-month
basis
- Strong bookings in Q1, particularly in North America and India
- North America:
- Strongest region for Q1 revenue
- Q1 2023 bookings increased sequentially and
year-over-year, reflecting less friction in the supply chain and
strong demand
- India:
- Strongest region in terms of Q1 bookings, second-strongest
region in terms of Q1 revenue
- Ongoing strong demand for ongoing 4G network and 5G
network rollouts
Doron Arazi, CEO,
commented: "Ceragon delivered double-digit revenue growth, margin
expansion, and solid profitability in the first quarter of 2023.
Our solutions are benefiting from strong demand and the supply
chain is normalizing both in terms of product availability and
costs. The result is concrete evidence that our improved execution
is delivering the intended improvements in our financial results.
Importantly, we have not seen signs of a slowdown in spending,
softness or pressures that others across the broader industry have
reported."
"While we are cognizant of the macro environment, the trends we
are seeing across our business are encouraging," continued Mr.
Arazi. "During the first quarter we recorded bookings that exceeded
our revenue, giving us greater confidence that we are in position
to achieve our full-year guidance. As we move through the year and
gain greater visibility into customer buying patterns, we may
consider upgrading our outlook."
Primary First Quarter 2023 Financial Results:
Revenues were $83.4 million, an increase of 18.6%
compared to $70.3 million in Q1 2022
and 10.4% compared to $75.5 million
in Q4 2022.
Gross profit was $28.2
million, giving us a gross margin of 33.8%, compared
with a gross margin of 27.5% in Q1 2022 and 32.5% in Q4 2022.
Operating income (loss) was $4.7 million compared
with $(1.3) million for Q1 2022 and
$(10.6) million for Q4 2022.
Net income (loss) was $2.0
million, or $0.02 per diluted
share, compared with $(2.3) million,
or $(0.03) per diluted share for Q1
2022 and $(15.0) million, or
$(0.18) per diluted share for Q4
2022.
Non-GAAP results were as follows: gross margin
34.0%, operating income $5.9 million,
and net income of $3.6 million, or
$0.04 per diluted share.
Cash and cash equivalents were $26.4 million at March 31,
2023, compared to $22.9
million at December 31,
2022.
For a reconciliation of GAAP to non-GAAP results, see the tables
below.
Revenue breakout by geography:
|
Q1
2023
|
North
America
|
32 %
|
India
|
24 %
|
Europe
|
14 %
|
Latin
America
|
12 %
|
APAC
|
12 %
|
Africa
|
6 %
|
Outlook
Management reaffirmed full year revenue guidance for
$325 - $345
million, and expects full-year profitability
2022 Annual Report on Form 20-F:
The Company also announced today the filing of its annual report
on Form 20-F for the fiscal year ended December 31, 2022, with the U.S. Securities and
Exchange Commission (SEC). The annual report on Form 20-F,
containing the final audited consolidated financial statements for
the year ended December 31, 2022, as
filed with the Securities and Exchange Commission on May 1, 2023, is available on our website at
www.ceragon.com and on the SEC's website at www.sec.gov.
Conference Call:
The Company will host a zoom web conference to discuss the 2023
first quarter as well as the final 2022 audited results today at
9 a.m. ET, followed by a
question-and-answer session for the investment community. Investors
are invited to register by clicking here. 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
600 service providers, as well as more than 1,600 private network
owners, in more than 130 countries. For more information please
visit: www.ceragon.com
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.
Safe Harbor
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 effects of
global economic trends, including recession, rising inflation,
rising interest rates, commodity price increases and fluctuations,
commodity shortages and exposure to economic slowdown; risks
associated with delays in the transition to 5G technologies and in
the 5G rollout; risks relating to the concentration of our business
on a limited number of large mobile operators and the fact that the
significant weight of their ordering, compared to the overall
ordering by other customers, coupled with inconsistent ordering
patterns, could negatively affect us; risks resulting from the
volatility in our revenues, margins and working capital needs,
substantial losses incurred and negative cash flows generated,
which, if continue, may significantly adversely impact our results
of operations and cash flow; the high volatility in the supply
needs of our customers, which from time to time lead to delivery
issues and may lead to us being unable to timely fulfill our
customer commitments; risks associated with inaccurate forecasts or
business changes, which may expose us to inventory-related losses
on inventory purchased by our contract manufacturers and other
suppliers, to increased expenses should unexpected production ramp
up be required, or to write off to parts of our inventory, which
would increase our cost of revenues; and such other risks,
uncertainties and other factors that could affect our results of
operation, as further detailed in Ceragon's most recent Annual
Report on Form 20-F, as published on May 1,
2023, and in Ceragon's other filings with the Securities and
Exchange Commission.
We caution you not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. Ceragon does
not assume any obligation to update any forward-looking statements
in order to reflect events or circumstances that may arise after
the date of this release unless 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
Rob Fink or Bob Meyers
FNK IR
Tel. 1+646-809-4048
crnt@fnkir.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,
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ 83,409
|
|
$ 70,319
|
|
Cost of
revenues
|
|
55,233
|
|
50,982
|
|
|
|
|
|
|
|
Gross profit
|
|
28,176
|
|
19,337
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
|
7,938
|
|
6,765
|
|
Sales and
marketing
|
|
10,196
|
|
8,772
|
|
General and
administrative
|
|
5,324
|
|
5,058
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
$ 23,458
|
|
$
20,595
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
4,718
|
|
(1,258)
|
|
|
|
|
|
|
|
Financial expenses and
others, net
|
|
1,458
|
|
759
|
|
|
|
|
|
|
|
Income (loss) before
taxes
|
|
3,260
|
|
(2,017)
|
|
|
|
|
|
|
|
Taxes on
income
|
|
1,292
|
|
271
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 1,968
|
|
$ (2,288)
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
|
$
0.02
|
|
$
(0.03)
|
|
Diluted net income
(loss) per share
|
|
$
0.02
|
|
$
(0.03)
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
basic net income (loss) per share
|
|
84,354,297
|
|
83,959,261
|
|
|
|
|
|
|
|
Weighted average number
of shares used in computing
diluted net income (loss) per share
|
|
84,992,254
|
|
83,959,261
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
March
31,
2023
|
|
December
31,
2022
|
ASSETS
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
26,423
|
|
$
22,948
|
Trade receivables,
net
|
|
100,590
|
|
100,034
|
Other accounts
receivable and prepaid expenses
|
|
14,890
|
|
15,756
|
Inventories
|
|
68,742
|
|
72,009
|
|
|
|
|
|
Total current
assets
|
|
210,645
|
|
210,747
|
|
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
|
|
Severance
pay and pension fund
|
|
4,607
|
|
4,633
|
Property
and equipment, net
|
|
31,110
|
|
29,456
|
Operating lease right-of-use assets
|
|
17,133
|
|
17,962
|
Intangible
assets, net
|
|
8,632
|
|
8,208
|
Other
non-current assets
|
|
18,189
|
|
18,312
|
|
|
|
|
|
Total non-current
assets
|
|
79,671
|
|
78,571
|
|
|
|
|
|
Total assets
|
|
$
290,316
|
|
$
289,318
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
|
$
60,601
|
|
$
67,384
|
Deferred
revenues
|
|
4,158
|
|
3,343
|
Short-term
loans
|
|
41,850
|
|
37,500
|
Operating lease
liabilities
|
|
3,436
|
|
3,745
|
Other accounts payable
and accrued expenses
|
|
21,082
|
|
20,864
|
|
|
|
|
|
Total current
liabilities
|
|
131,127
|
|
132,836
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Accrued severance pay
and pensions
|
|
9,232
|
|
9,314
|
Deferred
revenues
|
|
12,170
|
|
11,545
|
Other long-term
payables
|
|
2,668
|
|
2,653
|
Operating lease
liabilities
|
|
12,311
|
|
13,187
|
|
|
|
|
|
Total long-term
liabilities
|
|
36,381
|
|
36,699
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary
shares
|
|
224
|
|
224
|
Additional paid-in
capital
|
|
433,383
|
|
432,214
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
Accumulated other
comprehensive loss
|
|
(11,268)
|
|
(11,156)
|
Accumulated
deficits
|
|
(279,440)
|
|
(281,408)
|
|
|
|
|
|
Total shareholders'
equity
|
|
122,808
|
|
119,783
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
$
290,316
|
|
$
289,318
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
|
|
(U.S. dollars, in
thousands)
|
|
(Unaudited)
|
|
|
|
|
Three months
ended
March
31,
|
|
|
2023
|
|
2022
|
|
Cash flow from
operating activities:
|
|
|
|
|
Net income
(loss)
|
$1,968
|
|
$(2,288)
|
|
Adjustments required to
reconcile net income (loss) to net cash
provided by (used in) operating activities:
|
|
|
|
|
Depreciation and
amortization
|
2,553
|
|
2,941
|
|
Loss from sale of
property and equipment, net
|
10
|
|
18
|
|
Share-based
compensation expenses
|
1,169
|
|
746
|
|
Decrease in accrued
severance pay and pensions, net
|
(64)
|
|
(73)
|
|
Increase in trade
receivables, net
|
(290)
|
|
(1,564)
|
|
|
|
|
|
|
Decrease (Increase) in
other accounts receivable and prepaid
expenses (including other long term assets)
|
996
|
|
(1,778)
|
|
Decrease in operating
lease right-of-use assets
|
1,011
|
|
981
|
|
Decrease in
inventories
|
3,166
|
|
3,551
|
|
Decrease in trade
payables
|
(6,790)
|
|
(1,764)
|
|
|
|
|
|
|
Decrease in other
accounts payable and accrued expenses (including
other long term liabilities)
|
(294)
|
|
(1,273)
|
|
Decrease in operating
lease liability
|
(1,366)
|
|
(1,405)
|
|
Increase
in deferred revenues
|
1,440
|
|
92
|
|
Net cash
provided by (used in) operating activities
|
$ 3,509
|
|
$
(1,816)
|
|
Cash flow from
investing activities:
|
|
|
|
|
Purchase of property
and equipment
|
(3,142)
|
|
(2,523)
|
|
Purchase of intangible
assets
|
(1,288)
|
|
(203)
|
|
Net cash used in
investing activities
|
$
(4,430)
|
|
$
(2,726)
|
|
|
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
Proceeds from exercise
of stock options
|
-
|
|
81
|
|
Proceeds from bank
credits and loans, net
|
4,350
|
|
12,150
|
|
Net cash
provided by financing activities
|
$
4,350
|
|
$
12,231
|
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
$
46
|
|
$
192
|
|
Increase in cash and
cash equivalents
|
$
3,475
|
|
$
7,881
|
|
Cash and cash
equivalents at the beginning of the period
|
22,948
|
|
17,079
|
|
Cash and cash
equivalents at the end of the period
|
$
26,423
|
|
$
24,960
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
|
(U.S. dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
|
55,233
|
|
$
|
50,982
|
|
Stock based
compensation expenses
|
|
|
(179)
|
|
|
(132)
|
|
Changes in indirect tax
positions
|
|
|
(1)
|
|
|
-
|
|
Non-GAAP cost
of revenues
|
|
$
|
55,053
|
|
$
|
50,850
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
28,176
|
|
$
|
19,337
|
|
Gross profit
adjustments
|
|
|
180
|
|
|
132
|
|
Non-GAAP gross
profit
|
|
$
|
28,356
|
|
$
|
19,469
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development expenses
|
|
$
|
7,938
|
|
$
|
6,765
|
|
Stock based
compensation expenses
|
|
|
(246)
|
|
|
14
|
|
Non-GAAP Research and
development expenses
|
|
$
|
7,692
|
|
$
|
6,779
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
|
10,196
|
|
$
|
8,772
|
|
Stock based
compensation expenses
|
|
|
(376)
|
|
|
(277)
|
|
Non-GAAP Sales and
Marketing expenses
|
|
$
|
9,820
|
|
$
|
8,495
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
|
5,324
|
|
$
|
5,058
|
|
Retired CEO
compensation
|
|
|
-
|
|
|
96
|
|
Stock based
compensation expenses
|
|
|
(368)
|
|
|
(351)
|
|
Non-GAAP General and
Administrative expenses
|
|
$
|
4,956
|
|
$
|
4,803
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
|
$
|
4,718
|
|
$
|
(1,258)
|
|
Stock based
compensation expenses
|
|
|
1,169
|
|
|
746
|
|
Changes in indirect tax
positions
|
|
|
1
|
|
|
-
|
|
Retired CEO
compensation
|
|
|
-
|
|
|
(96)
|
|
Non-GAAP operating
income (loss)
|
|
$
|
5,888
|
|
$
|
(608)
|
|
GAAP financial expenses
and others, net
|
|
$
|
1,458
|
|
$
|
759
|
|
Leases – financial
income
|
|
|
358
|
|
|
425
|
|
Non-GAAP financial
expenses and others,
net
|
|
$
|
1,816
|
|
$
|
1,184
|
|
|
|
|
|
|
|
|
|
GAAP Tax
expenses
|
|
$
|
1,292
|
|
$
|
271
|
|
Non cash tax
adjustments
|
|
|
(853)
|
|
|
(210)
|
|
Non-GAAP Tax
expenses
|
|
$
|
439
|
|
$
|
61
|
|
|
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RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
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(U.S. dollars in
thousands, except share and per share data)
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(Unaudited)
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Three months
ended
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March
31,
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2023
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2022
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GAAP net income
(loss)
|
|
$
|
1,968
|
|
$
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(2,288)
|
|
|
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Stock based
compensation expenses
|
|
|
1,169
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|
|
746
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|
|
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Changes in
indirect tax positions
|
|
|
1
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|
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-
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Leases –
financial income
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(358)
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(425)
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Retired
CEO compensation
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-
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(96)
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Non-cash
tax adjustments
|
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853
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210
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Non-GAAP net income
(loss)
|
|
$
|
3,633
|
|
$
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(1,853)
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GAAP basic net income
(loss) per share
|
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$
|
0.02
|
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$
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(0.03)
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GAAP
diluted net income (loss) per share
|
|
$
|
0.02
|
|
$
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(0.03)
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Non-GAAP diluted net
income (loss) per share
|
|
$
|
0.04
|
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$
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(0.02)
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Weighted average number
of shares used in computing
GAAP basic and diluted net income (loss) per share
|
|
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84,354,297
|
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83,959,261
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Weighted average number
of shares used in computing
GAAP diluted net income (loss) per share
|
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84,992,254
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83,959,261
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Weighted average number
of shares used in computing
Non-GAAP diluted net income (loss)
per share
|
|
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86,712,061
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83,959,261
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View original
content:https://www.prnewswire.com/news-releases/ceragon-networks-reports-2023-first-quarter-financial-results-301811865.html
SOURCE Ceragon Networks Ltd.