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Ceragon Networks Reports Second Quarter 2017 Financial Results
[August 07, 2017]

Ceragon Networks Reports Second Quarter 2017 Financial Results


LITTLE FALLS, New Jersey, Aug. 7, 2017 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2017.

Second Quarter 2017 Highlights:

Revenues - $93.3 million, up 33.3% from the second quarter of 2016, and up 22.8% from the first quarter of 2017.

Gross margin – 31.3%, compared to 34.7% in the second quarter of 2016 and 29.3% in the first quarter of 2017.

Operating income - $8.0 million, compared to $4.0 million in the second quarter of 2016, and $2.0 million in the first quarter of 2017.

Net income (loss) - net income of $5.0 million, or $0.06 per diluted share for the second quarter of 2017.  Net income for the second quarter of 2016 was $0.1 million, or $0.00 per diluted share. Net loss for the first quarter of 2017 was $(0.1) million or $(0.00) per diluted share.

Non-GAAP results - gross margin was 31.8%, operating profit was $8.8 million, and net income was $6.0 million, or $0.07 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Cash and cash equivalents - $34.1 million at June 30, 2017, compared to $36.5 million at March 31, 2017.

"We are pleased to report a very strong quarter, with total revenue boosted by the recognition of revenue related to large orders received in Q1 from a customer in India," said Ira Palti, president and CEO of Ceragon. "As a result of the additional gross profit contribution from this extra business, Q2 net income was a record, except in those quarters where we had large non-recurring items with a positive impact on net income. We also generated positive cash flow, paid down additional debt, and increased our net cash to $26 million. Our bookings in Q2 support our expectation that we will return to a quarterly run rate of $75 to $80 million during the second half of the year. We expect gross margin in the second half to be above 32%, and we remain on track to achieve our goal of substantial growth in net income for 2017 compared to 2016."

Supplemental geographical breakdown of revenue for the second quarter of 2017:

  • Europe:                            12%    
  • Africa:                                3%                  
  • North America:                   7%
  • Latin America:                  14%
  • India:                               53%
  • APAC:                             11%

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) 230-1059 or International: +1 (612) 288-0337, 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: http://www.ceragon.com/about-us/ceragon/investor-relations, 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: 426481. A replay of both the call and the webcast will be available through September 7, 2017.

About Ceragon

Ceragon Networks Ltd. (NASDAQ: CRNT) is the world's #1 wireless backhaul specialist. We help operators and other service providers worldwide increase operational efficiency and enhance end customers' quality of experience with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 4G, mission-critical multimedia services and other applications at high reliability and speed. Ceragon's unique multicore technology provides a highly reliable, high-capacity 4G wireless backhaul with minimal use of spectrum, power and other resources. It enables 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. Our solutions are deployed by more than 460 service providers, as well as hundreds of private network owners, in more than 130 countries.

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 revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, 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 associated with a decline in revenues; the risks relating to the concentration of Ceragon's business in India, Latin America and in developing nations and the political, economic and regulatory risks from doing business in those regions, including  potential currency restrictions; the risk associated with a change in Ceragon's gross margin as a result of changes in the geographic mix of revenues; the risk associated with the loss of a single customer or customer group, which represents a significant portion of Ceragon's revenues; the risk associated with Ceragon's failure to effectively compete with other wireless equipment providers; 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:



Doron Arazi           

or  

Claudia Gatlin

+972 3 5431 660


+1 212 830-9080

dorona@ceragon.com  


claudiag@ceragon.com




Media:



Tanya Solomon



+972 3 5431163



tanyas@ceragon.com



-tables follow-

 

 

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,



2017


2016


2017


2016



















Revenues


$     93,334


$     70,010


$     169,355


$       129,844

Cost of revenues


64,131


45,720


117,848


84,263










Gross profit


29,203


24,290


51,507


45,581










Operating expenses:









Research and development


6,128


5,355


12,235


10,638

Selling and marketing


10,041


9,716


19,776


19,573

General and administrative


5,065


5,192


9,570


10,110










Total operating expenses


$     21,234


$    20,263


$      41,581


$        40,321










Operating income


7,969


4,027


9,926


5,260










Financial expenses, net


1,481


2,372


3,079


3,290










Income before taxes


6,488


1,655


6,847


1,970










Taxes on income


1,506


1,606


1,993


2,357










Net income (loss)


$       4,982


$           49


$        4,854


$            (387)










Basic net income (loss) per share


$        0.06


$        0.00


$          0.06


$           (0.00)

Diluted net income (loss) per share


$        0.06


$        0.00


$          0.06


$           (0.00)










Weighted average number of shares used in
computing basic net income (loss) per share


77,891,218


77,674,747


77,845,690


77,664,815










Weighted average number of shares used in
computing diluted net income (loss) per share


80,202,048


77,919,559


80,359,375


77,664,815

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)





June 30,
2017


December 31,
2016

ASSETS


Unaudited


Audited   






CURRENT ASSETS:





Cash and cash equivalents


$        34,087


$     36,338

Trade receivables, net


114,077


107,395

Other accounts receivable and prepaid expenses


19,948


17,076

Inventories


56,158


45,647

Total current assets


224,270


206,456






NON-CURRENT ASSETS:





   Deferred taxes, net


1,204


1,344

   Severance pay and pension fund


5,210


4,575

   Property and equipment, net


28,277


27,560

Intangible assets, net


790


1,544

   Other non-current  assets


3,931


2,746

Total non-current assets


39,412


37,769

Total assets


$    263,682


$     244,225

 

LIABILITIES AND SHAREHOLDERS' EQUITY





 

CURRENT LIABILITIES:





Short term loan


$         8,000


$       17,000

Trade payables


90,067


68,408

Deferred revenues


3,674


2,673

Other accounts payable and accrued expenses


19,711


22,425

Total current liabilities


121,452


110,506

 

LONG-TERM LIABILITIES:





Accrued severance pay and pension


9,745


9,198

Other long term payables


8,829


8,357

Total long-term liabilities


18,574


17,555

 

SHAREHOLDERS' EQUITY:





Share capital:





Ordinary shares


214


214

    Additional paid-in capital


410,128


409,320

Treasury shares at cost


(20,091)


(20,091)

Other comprehensive loss


(6,018)


(7,848)

Accumulated deficits


(260,577)


(265,431)






Total shareholders' equity


123,656


116,164






Total liabilities and shareholders' equity


$        263,682


$     244,225

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2017


2016


2017


2016

Cash flow from operating activities:








Net income (loss)

$          4,982


$            49


$        4,854


$        (387)

Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
















Depreciation and amortization

2,229


2,668


4,574


4,976

Stock-based compensation expense

261


181


619


592

Decrease (increase) in trade and other  receivables, net

(16,519)


(3,875)


(9,288)


30,503

Decrease (increase) in inventory, net of write off

(5,571)


1,171


(10,555)


1,603

Decrease in deferred tax asset, net

155


972


140


1,205

 Increase (decrease) in trade payables and accrued liabilities

14,778


1,616


18,775


(18,445)

Increase (decrease) in deferred revenues

2,053


(267)


1,018


(4,934)

Other adjustments

(100)


(218)


(88)


(108)

Net cash provided by operating activities

$          2,268


$      2,297


$     10,049


$    15,005

 

 

Cash flow from investing activities:








Purchase of property and equipment

(1,196)


(1,407)


(3,505)


(3,608)

Investment in short-term bank deposits

-


(120)


-


(153)

Net cash used in investing activities

$       (1,196)


$    (1,527)


$     (3,505)


$    (3,761)









Cash flow from financing activities:








Proceeds from share options exercise

115


7


189


7

Repayment of bank loans

(3,500)


(8,400)


(9,000)


(13,472)

Net cash used in financing activities

$       (3,385)


$    (8,393)


$     (8,811)


$  (13,465)









Translation adjustments on cash and cash equivalents

$            (60)


$         155


$            16


$         280

Decrease in cash and cash equivalents

$       (2,373)


$    (7,468)


$     (2,251)


$    (1,941)

Cash and cash equivalents at the beginning of the period

36,460


41,845


36,338


36,318

Cash and cash equivalents at the end of the period

$       34,087


$   34,377


$    34,087


$   34,377









 

 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS




(U.S. dollars in thousands)




(Unaudited)










Three months ended


Six months ended



June 30,


June 30,



2017


2016


2017


2016


GAAP cost of revenues


$

64,131


$

45,720


$

117,848


$

84,263

Amortization of intangible assets



(306)



(307)



(609)



(613)

Stock based compensation expenses



(12)



(3)



(32)



(21)

Changes in pre-acquisition indirect tax positions



(165)



(269)



(327)



(403)

Non-GAAP cost of revenues


$

63,648


$

45,141


$

116,880


$

83,226














GAAP gross profit


$

29,203


$

24,290


$

51,507


$

45,581

Gross profit adjustments



483



579



968



1,037

Non-GAAP gross profit


$

29,686


$

24,869


$

52,475


$

46,618














GAAP Research and development expenses


$

6,128


$

5,355


$

12,235


$

10,638

Stock based compensation expenses



(45)



2



(123)



(126)

Non-GAAP Research and development expenses


$

6,083


$

5,357


$

12,112


$

10,512














 

GAAP Sales and Marketing expenses


$

10,041


$

9,716


$

19,776


$

19,573

Amortization of intangible assets



(74)



(106)



(145)



(205)

Stock based compensation expenses



(75)



(88)



(153)



(220)

Non-GAAP Sales and Marketing expenses


$

9,892


$

9,522


$

19,478


$

19,148














GAAP General and Administrative expenses


$

5,065


$

5,192


$

9,570


$

10,110

Stock based compensation expenses



(129)



(92)



(311)



(225)

Non-GAAP General and Administrative expenses


$

4,936


$

5,100


$

9,259


$

9,885














GAAP financial expenses


$

1,481


$

2,372


$

3,079


$

3,290

Currency devaluation in Venezuela related expenses



-



-



-



907

Non-GAAP financial expenses


$

1,481


$

2,372


$

3,079


$

4,197

 

GAAP Tax expenses


$

1,506


$

1,606


$

1,993


$

2,357

Changes in pre acquisition tax liability



-



(453)



-



(453)

Non cash tax adjustments



(187)



(242)



(285)



(488)

Non-GAAP Tax expenses


$

1,319


$

911


$

1,708


$

1,416


 

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS


(U.S. dollars in thousands, except share and per share data)


(Unaudited)






 Three months ended


Six months ended




June 30,


June 30,





2017



2016



2017



2016
















GAAP net income (loss)


$

4,982


$

49


$

4,854


$

(387)


Amortization of intangible assets



380



413



754



818


Stock based compensation expenses



261



181



619



592


Changes in pre-acquisition indirect tax positions



165



722



327



856


Currency devaluation in Venezuela related expenses



-



-



-



(907)


Non-cash tax adjustments



187



242



285



488


Non-GAAP net income 


$

5,975


$

1,607


$

6,839


$

1,460
















 

GAAP basic net income (loss) per share


$

0.06


$

0.00


$

0.06


$

(0.00)
















 

GAAP diluted net income (loss) per share


$

0.06


$

0.00


$

0.06


$

(0.00)


 

Non-GAAP basic and diluted net income per share


$

0.07


$

0.02


$

0.08


$

0.02
















 

Weighted average number of shares used in computing GAAP
basic net income (loss) per share



77,891,218



77,674,747



77,845,690



77,664,815
















 

Weighted average number of shares used in computing GAAP
diluted net income (loss) per share



80,202,048



77,919,559



80,359,375



77,664,815
















 

Weighted average number of shares used in computing
Non-GAAP diluted net income per share



80,404,841



78,525,583



80,580,267



78,133,900


 

 

View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-second-quarter-2017-financial-results-300500222.html

SOURCE Ceragon Networks Ltd.


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