Ceragon Networks Reports First Quarter 2013 Financial Results PR Newswire PARAMUS, N.J., May 6, 2013 PARAMUS, N.J., May 6, 2013 /PRNewswire/ --Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the first quarter which ended March 31, 2013. Revenues for the first quarter of 2013 reached $90.1 million, down 18% from $110.0 million for the first quarter of 2012, and down 16% from $106.8 million in the fourth quarter of 2012. Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2013 was $(14.1) million or $(0.38) per basic share and diluted share, compared to net loss of $(7.4) million in the first quarter of 2012, or $(0.20) per basic share and diluted share. On a non-GAAP basis, excluding (a) $1.1 million of stock-based compensation expenses, (b) $0.7 million amortization of intangible assets, (c) $0.4 million inventory step up related to the Nera acquisition, (d) $2.8 million restructuring and other charges related to reduction in workforce (e) $0.3 million of changes in pre-acquisition indirect tax positions and (f) $3.1 million finance expenses related to a non-recurring currency devaluation in Venezuela, net loss for the first quarter was $(5.7) million, or $(0.16) per basic share and diluted share. Non-GAAP net loss for the first quarter of 2012 was $(2.2) million, or $(0.06) per basic share and diluted share (please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP). Gross margin on a GAAP basis in the first quarter of 2013 was 30.5% of revenues. Gross margin on a non-GAAP basis was 31.9% of revenues. Operating loss on a GAAP basis in the first quarter of 2013 was $(8.7) million. On a non-GAAP basis operating loss was $(3.4) million. Cash and cash investments at the end of the quarter were $51.6 million. "Our financial results for the first quarter of 2013 reflect longer sales cycles," said Ira Palti, President and CEO of Ceragon. "The outlook remains the same as we indicated on April 8^th. We are not seeing carriers cancelling or reducing the scope of their planned projects, and the delays in closing deals relate mainly to operator hesitation during a period of reevaluating business models with a network architecture transition on the horizon. "Meanwhile, the response to our new product line from initial evaluations is very encouraging, and we expect to be able to capitalize on our leadership position beginning next year when the transition to new architectures expands beyond early adopters." Supplemental revenue breakouts: Geographical breakdown, first quarter of 2013: oEurope: 19% oAfrica: 13% oNorth America: 9% oLatin America: 38% oIndia: 8% oAPAC:13% A conference call will follow today, May 6, 2013, beginning at 9:00 a.m. EDT. Investors are invited to join the Company's teleconference by calling (800) 230-1059, or international +1(612) 234-9960 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/ir_events.asp?lang=0 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: 287910A replay of both the call and the webcast will be available through June 6, 2013. About Ceragon Networks Ltd. Ceragon Networks Ltd.(NASDAQ: CRNT) is the #1 wireless backhaul specialist. We provide innovative, flexible and cost-effective wireless backhaul and fronthaul solutions that enable mobile operators and other wired/wireless service providers to deliver 2G/3G, 4G/LTE and other broadband services to their subscribers. Ceragon's high-capacity, solutions use microwave technology to transfer voice and data traffic while maximizing bandwidth efficiency, to deliver more capacity over longer distances under any deployment scenario. Based on our extensive global experience, Ceragon delivers turnkey solutions that support service provider profitability at every stage of the network lifecycle enabling faster time to revenue, cost-effective operation and simple migration to all-IP networks.As the demand for data pushes the need for ever-increasing capacity, Ceragon is committed to serve the market with unmatched technology and innovation, ensuring effective solutions for the evolving needs of the marketplace. Our solutions are deployed by more than 430 service providers in over 130 countries. Ceragon Networks® is a registered trademark 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. Company and Investor Media Contact: Media Contact: Contact: Yoel Knoll Abigail Levy-Gurwitz Karen Quatromoni Ceragon Networks Ltd. Ceragon Networks Ltd. Rainier Communications Tel. +1 (201)-853-0228 Tel: +1-(201)-853-0271 Tel. 508-475-0025 x150 email@example.com firstname.lastname@example.org email@example.com Join the Discussion: Linked In Facebook Twitter YouTube This press release may contain statements concerning Ceragon's future prospects that are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. These are important factors that could cause actual results to differ materially from forecasts and estimates. Some of the factors that could significantly impact the forward-looking statements in this press release include the risk of significant expenses in connection with potential contingent tax liability associated with Nera's prior operations or facilities, risks associated with unexpected changes in customer demand, risks associated with increased working capital needs, and other risks and uncertainties, which are discussed in greater detail in Ceragon's Annual Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and Ceragon undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Ceragon's public filings are available from the Securities and Exchange Commission's website at www.sec.gov or may be obtained on Ceragon's website at www.ceragon.com Ceragon Reports First Quarter 2013 Results CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except share and per share data) (Unaudited) Three months ended March 31, 2013 2012 Revenues $ 90,097 $ 110,046 Cost of revenues 62,637 77,237 Gross profit 27,460 32,809 Operating expenses: Research and development, net 11,906 12,155 Selling and marketing 17,533 19,634 General and administrative 6,715 7,215 Total operating expenses $ 36,154 $ 39,004 Operating loss 8,694 6,195 Financial expenses, net 4,629 906 Loss before taxes 13,323 7,101 Taxes on income 818 290 Net loss $ 14,141 $ 7,391 Basic and diluted net loss per share $ 0.38 $ 0.20 Weighted average number of shares used in 36,755,603 36,346,482 computing basic and diluted net loss per share Ceragon Reports First Quarter 2013 Results CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) (Unaudited) March 31, December 31, 2013 2012 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 46,805 $ 47,099 Short-term bank deposits 639 422 Trade receivables, net 128,655 149,120 Deferred taxes, net 7,382 8,589 Other accounts receivable and prepaid expenses 36,812 38,743 Inventories 62,660 65,554 Total current assets 282,953 309,527 NON-CURRENT ASSETS: Marketable securities 4,111 4,068 Deferred taxes, net 10,083 9,140 Severance pay funds and pension 7,226 7,163 Property and equipment, net 33,826 33,642 Intangible assets, net 9,155 9,809 Goodwill 15,318 15,283 Other non-current assets 5,556 4,964 Total non-current assets 85,275 84,069 Total assets $ 368,228 $ 393,596 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term loans, including current maturities $ 26,232 $ 25,232 of long term loan Trade payables 81,615 102,079 Deferred revenues 15,467 16,719 Other accounts payable and accrued expenses 46,415 36,090 Total current liabilities 169,729 180,120 LONG-TERM LIABILITIES Long term bank loan, net of current maturities 16,478 18,536 Accrued severance pay and pension 12,208 12,311 Other long term liabilities 37,595 38,920 66,281 69,767 SHAREHOLDERS' EQUITY: Share capital: Ordinary shares 98 98 Additional paid-in capital 320,318 318,106 Treasury shares at cost (20,091) (20,091) Accumulated other comprehensive loss, net of (52) (490) taxes Accumulated deficit (168,055) (153,914) Total shareholders' equity 132,218 143,709 Total liabilities and shareholders' equity $ 368,228 $ 393,596 Ceragon Reports First Quarter 2013 Results CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (U.S. dollars, in thousands) (Unaudited) Three months ended March 31, 2013 2012 Cash flow from operating activities: Net loss $ (14,141) $ (7,391) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 4,038 3,771 Stock-based compensation expense 1,075 1,585 Decrease (increase) in trade and other 23,652 (2,104) receivables, net Decrease in inventory, net of write-off 2,863 17,043 Increase (decrease) in trade payables and accrued liabilities (13,425) 1,774 Decrease in deferred revenues (1,252) (9,172) Decrease (increase) in deferred tax asset, net 150 (377) Other adjustments (101) (104) Net cash provided by operating activities $ 2,859 $ 5,025 Cash flow from investing activities: Purchase of property and equipment ,net (2,895) (3,303) Investment in short and long-term bank deposit (217) (1,266) Proceeds from short and long-term bank deposits - 2,250 Proceeds from sale and maturities of marketable - 9,717 securities Net cash provided by (used in) investing $ (3,112) $ 7,398 activities Cash flow from financing activities: Proceeds from exercise of options 1,137 213 Proceeds from short-term bank loan 3,000 - Repayment of loans from financial institutions (4,058) (2,058) Net cash provided by (used in) financing $ 79 $ (1,845) activities Translation adjustments on cash and cash $ (120) $ (151) equivalents Increase (decrease) in cash and cash equivalents $ (294) $ 10,427 Cash and cash equivalents at the beginning of the 47,099 28,991 period Cash and cash equivalents at the end of the $ 46,805 $ 39,418 period Ceragon Reports First Quarter 2013 Results RECONCILIATION OF NON-GAAP FINANCIAL RESULTS (U.S. dollars in thousands, except share and per share data) (Unaudited) Three months ended March 31, 2013 2012 GAAP (as Adjustments Non-GAAP Non-GAAP reported) Revenues $ 90,097 $ 90,097 $ 110,046 Cost of revenues 62,637 (a) 1,295 61,342 74,940 Gross profit 27,460 28,755 35,106 Operating expenses: Research and development, 11,906 (b) 1,523 10,383 11,731 net Selling and marketing 17,533 (c) 1,423 16,110 18,019 General and administrative 6,715 (d) 1,067 5,648 6,363 Total operating expenses $ 36,154 $ 32,141 $ 36,113 Operating loss 8,694 3,386 1,007 Financial expenses, net 4,629 (e) 3,133 1,496 906 Loss before taxes 13,323 4,882 1,913 Taxes on income 818 818 290 Net loss $ 14,141 $ 5,700 $ 2,203 Basic and diluted net loss $ 0.38 $ 0.16 $ 0.06 per share Weighted average number of shares used in computing basic and 36,755,603 36,755,603 36,346,482 diluted net loss per share Total adjustments 8,441 (a) Cost of revenues includes $0.3 million of amortization of intangible assets, $0.4 million of inventory step-up, $0.3 million of changes in pre-acquisition indirect tax positions, $0.1 million of stock based compensation expenses and $0.2 million of restructuring and other charges related to reduction in workforce in the three months ended March 31, 2013. (b)Research and development expenses include $1.2 million of restructuring and other charges related to reduction in workforce and $0.3 million of stock based compensation expenses in the three months ended March 31, 2013. (c) Selling and marketing expenses includes $0.3 million of amortization of intangible assets, $0.7 million of restructuring and other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013. (d) General and administrative expenses includes $0.7 million of restructuring other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013. (e) Financial expenses includes $3.1 million non-recurring currency devaluation in Venezuela in the three months ended March 31, 2013 Ceragon Reports First Quarter 2013 Results RECONCILIATION BETWEEN REPORTED AND NON-GAAP NET LOSS (U.S. dollars in thousands) (Unaudited) Three months ended March 31, 2013 Reported GAAP net loss 14,141 Stock based compensation expenses 1,075 Amortization of intangible assets 666 Inventory step-up 459 Restructuring and other charges related to reduction in 2,844 workforce Changes in pre-acquisition indirect tax positions 264 Financial expenses related to non-recurring currency devaluation 3,133 in Venezuela Non-GAAP net loss 5,700 SOURCE Ceragon Networks Ltd. Website: http://www.ceragon.com
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Ceragon Networks Reports First Quarter 2013 Financial Results
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