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Ceragon Networks Reports First Quarter 2018 Financial Results
[May 07, 2018]

Ceragon Networks Reports First Quarter 2018 Financial Results


LITTLE FALLS, New Jersey, May 7, 2018 /PRNewswire/ --

Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist, today reported results for the first quarter ended March 31, 2018.

First Quarter 2018 Highlights

Revenues - $83.3 million, up 9.5% from the first quarter of 2017, and down 3.9% from the fourth quarter of 2017.

Gross margin – 33.1%, compared to 29.3% in the first quarter of 2017 and 33.6% in the fourth quarter of 2017.

Operating income - $5.4 million, compared to $2.0 million in the first quarter of 2017 and $7.5 million in the fourth quarter of 2017.

Net income (loss) - net income of $2.1 million, or $0.03 per diluted share for the first quarter of 2018.  Net loss for the first quarter of 2017 was $(0.1) million, or $(0.00) per diluted share. Net income for the fourth quarter of 2017 was $7.2 million or $0.09 per diluted share.

Non-GAAP results - gross margin was 33.2%, operating income was $5.7 million, and net income was $3.0 million, or $0.04 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Cash and cash equivalents - $26.0 million at March 31, 2018, compared to $25.9 million at December 31, 2017.

"We are beginning 2018 with a strong quarter in all respects," said Ira Palti, president and CEO of Ceragon. "We had strong bookings in Q1, with particular strength coming from India. Revenue increased 9.5% year over year, and we now have enough visibility to raise our quarterly run rate expectations to $80 to $85 million during the balance of this year. We won several important new projects in Q1 and our objective is to continue to gradually gain market share. Our financial goal is to make 2018 the fourth consecutive year of increasing net income, despite facing some challenges with factors we can't control such as currency headwinds and shortages of passive components."

Supplemental revenue breakouts by geography:

First quarter 2018:

  • Europe:                          12%
  • Africa:                              2%
  • North America:                11%
  • Latin America:                 13%
  • India:                              46%
  • APAC:                            16%

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) 398-9367 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: https://www.ceragon.com/about-ceragon/investor-relations/events-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: 446862. A replay of both the call and the webcast will be available through June 7, 2018.

About Ceragon Networks Ltd.

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 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.

Join the Discussion:

LinkedIn: https://www.linkedin.com/company/ceragon-networks   
Facebook: https://www.facebook.com/CeragonNetworks    
Twitter: https://twitter.com/Ceragon
YouTube: https://www.youtube.com/user/CeragonNetworks?feature=mhum
Blog: http://blog.ceragon.com/blog

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 due to our focus on a single market segment; risks relating to the concentration of Ceragon's business in certain geographic regions such as India, and in other developing nations; political, economic and regulatory risks from doing business in those developing regions, including potential currency restrictions and fluctuations; risks related to our ability to meet the demand for our products due shortages in raw materials including certain passive components; risks associated with a change in Ceragon's gross margin as a result of changes in the geographic mix of revenues and/or as a results of increase in costs of raw material, including certain passive components; risks associated with the loss of a single customer or customer group, which represents a significant portion of Ceragon's revenues; risks 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.

-tables follow-

 





CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



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



(Unaudited)








Three months ended



March 31,




2018


2017










Revenues


$       83,275


$      76,021



Cost of revenues


55,671


53,717










Gross profit


27,604


22,304










Operating expenses:







Research and development, net


7,214


6,107



Selling and marketing


10,562


9,735



General and administrative


4,459


4,505










Total operating expenses


$       22,235


$       20,347










Operating income


5,369


1,957



Financial expenses, net


2,034


1,598










Income before taxes


3,335


359










Taxes on income


1,265


487










Net income (loss)


$         2,070


$         (128)










 Basic net income (loss) per share


$           0.03


$        (0.00)



 Diluted net income (loss) per share


$           0.03


$        (0.00)



 

 

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


78,080,146


77,796,425



 

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


80,065,171


77,796,425











 

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)







March 31, 2018


December 31, 2017

ASSETS


Unaudited


Audited






CURRENT ASSETS:





Cash and cash equivalents


$       25,956


$       25,877

Trade receivables, net


116,002


113,719

Other accounts receivable and prepaid expenses


14,081


17,052

 Inventories


49,676


54,164






Total current assets


205,715


210,812






NON-CURRENT ASSETS:





Long-term bank deposits


996


996

Deferred tax assets


505


988

    Severance pay and pension funds


5,445


5,459

    Property and equipment, net


29,367


29,870

    Intangible assets, net


2,656


2,199

Other non-current assets


3,506


3,269






Total non-current assets


42,475


42,781






Total assets


$     248,190


$     253,593






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:










Trade payables


$         63,007


$        75,476

Deferred revenues


6,130


5,193

Other accounts payable and accrued expenses


28,548


24,781






Total current liabilities


97,685


105,450






LONG-TERM LIABILITIES:





Deferred tax liability


132


141

Accrued severance pay and pension


10,279


10,085

Other long term payables


4,033


4,019






Total long-term liabilities


14,444


14,245






SHAREHOLDERS' EQUITY:





Share capital:





     Ordinary shares


214


214

Additional paid-in capital


411,270


410,817

Treasury shares at cost


(20,091)


(20,091)

Other comprehensive loss


(7,601)


(7,171)

Accumulated deficits


(247,731)


(249,871)






Total shareholders' equity


136,061


133,898






Total liabilities and shareholders' equity


$    248,190


$    253,593

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)




Three months ended



March 31,



2018


2017

Cash flow from operating activities:





Net Income (loss)


$         2,070


$         (128)

Adjustments to reconcile net income (loss) to net cash

   provided by operating activities:










Depreciation and amortization


1,511


2,345

Stock-based compensation expense


353


358

Decrease in trade and other receivables, net


183


7,231

Decrease (increase) in inventory, net of write-off


4,488


(4,984)

Decrease (increase) in deferred tax asset, net


474


(15)

Increase (decrease) in trade payables and accrued    

liabilities


(5,854)


3,997

Increase (decrease) in deferred revenues


940


(1,035)

Other adjustments


208


12

Net cash provided by operating activities

$          4,373


$         7,781






Cash flow from investing activities:





Purchase of property and equipment, net


(3,299)


(2,309)

Purchase of intangible assets, net


(1,086)


-

Net cash used in investing activities


$       (4,385)


$      (2,309)






Cash flow from financing activities:





Repayment of loans from financial institutions

-


(5,500)

Proceeds from exercise of options

100


74

Net cash provided by (used in) financing activities


$              100


$       (5,426)






Translation adjustments on cash and cash equivalents

$                (9)


$               76






Increase in cash and cash equivalents

$                 79


$             122






Cash and cash equivalents at the beginning of the period

25,877


36,338






Cash and cash equivalents at the end of the period

$        25,956


$       36,460

 

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,




2018


2017








GAAP cost of revenues


$     55,671


$     53,717


Amortization of intangible assets


-


(303)


Stock based compensation expenses


(17)


(20)


Changes in pre-acquisition indirect tax positions


(15)


(162)


Non-GAAP cost of revenues


$    55,639


$     53,232








GAAP gross profit


$     27,604


$    22,304


Gross profit adjustments


32


485


Non-GAAP gross profit


$     27,636


$    22,789








GAAP Research and development expenses


$       7,214


$      6,107


Stock based compensation expenses


(60)


(78)


Non-GAAP Research and development expenses


$       7,154


$      6,029








GAAP Sales and Marketing expenses


$    10,562


$      9,735


Amortization of intangible assets


-


(71)


Stock based compensation expenses


(144)


(78)


Non-GAAP Sales and Marketing expenses


$    10,418


$      9,586








GAAP General and Administrative expenses


$      4,459


$      4,505


Stock based compensation expenses


(132)


(182)


Non-GAAP General and Administrative expenses


$      4,327


$      4,323








GAAP taxes on income


$      1,265


$         487


Non-cash tax adjustments


(564)


(98)


Non-GAAP taxes on income


$         701


$         389


 

 

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,




2018


2017










GAAP net income (loss)


$     2,070


$       (128)



Stock based compensation expenses


353


358



Amortization of intangible assets


-


374



Changes in pre-acquisition indirect tax positions


15


162



Non-cash tax adjustment


564


98





$     3,002


$       864



Non-GAAP net income 









GAAP basic net income (loss) per share


$       0.03


$    (0.00)










$      0.03


$     (0.00)









GAAP diluted net income (loss) per share










$      0.04


$      0.01









Non-GAAP basic and diluted net income per share
































Weighted average number of shares used in computing








    GAAP basic net income (loss) per share


78,080,146


77,796,425











80,065,171


77,796,425









Weighted average number of shares used in computing    








    GAAP diluted net income (loss) per share





















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


80,377,797


80,751,956









 

Investors:



Doron Arazi                           

or               

Claudia Gatlin

+972-3-5431-660


+1-212-830-9080

[email protected]                     


[email protected]







Media:



Tanya Solomon



+972-3-5431163



[email protected]



 

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SOURCE Ceragon Networks Ltd


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