Ceragon Networks Reports First Quarter 2013 Financial Results

        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
yoelk@ceragon.com          abigaill@ceragon.com  kquatromoni@rainierco.com

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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