Breaking

Russian International Reserves Fall $15.7 Billion in Week to Dec. 19
Tweet TWEET

Ceragon Networks Reports First Quarter 2014 Financial Results

        Ceragon Networks Reports First Quarter 2014 Financial Results

PR Newswire

PARAMUS, N.J., May 8, 2014

PARAMUS, N.J., May 8, 2014 /PRNewswire/ --Ceragon Networks Ltd. (NASDAQ:
CRNT), the #1 wireless hauling specialist today reported results for the first
quarter which ended March 31, 2014.

Revenues for the first quarter of 2014 were within the range of updated
guidance at $70.5 million, down 22% from $90.1 million for the first quarter
of 2013, and down 21% from $89.5 million in the fourth quarter of 2013.

Net loss in accordance with US Generally Accepted Accounting Principles (GAAP)
for the first quarter of 2014 was $(27.0) million or $(0.51) per basic share
and diluted share, compared to net loss of $(14.1) million in the first
quarter of 2013, or $(0.38) per basic share and diluted share.

On a non-GAAP basis, net loss for the first quarter was $(12.9) million, or
$(0.25) per basic share and diluted share, excluding (a) $1.1 million of
stock-based compensation expenses, (b) $0.5 million amortization of intangible
assets, (c) $4.4 million restructuring and other expenses associated with the
2013 restructuring (d) $0.3 million of changes in pre-acquisition indirect tax
positions (e) $4.1 million finance expenses related to a currency devaluation
in Venezuela (f) $2.2 million related to certain transactions to expatriate
cash from Venezuela and Argentina, and (g) $1.5 million of non-cash tax
adjustments. Non-GAAP net loss for the first quarter of 2013 was $(5.7)
million, or $(0.16) 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 2014 was 22.1% of
revenues. Gross margin on a non-GAAP basis was 23.3% of revenues.

Operating loss on a GAAP basis in the first quarter of 2014 was $(17.1)
million. On a non-GAAP basis, operating loss was $(10.8) million.

Cash and cash investments at the end of the quarter were $30.5 million. On
April 2, the company announced a settlement agreement with Eltek ASA pursuant
to which it has received $17 million in cash in the second quarter.

"We are pleased to see the strong bookings during the first quarter,
especially for our new IP-20 products," said Ira Palti, President and CEO of
Ceragon. "As previously indicated, our bookings increased substantially from
the fourth quarter and the IP-20 products accounted for more than 40% of total
bookings. The number of requests for proposals, evaluations, trials and other
new business activity continues to increase with both existing and new
customers, and we are making progress on some large projects. These factors
are the basis of our expectation that the second half of the year will be
substantially better than the first half.

"Meanwhile, as we indicated in our update on April 2^nd, our first quarter
revenues were affected by our decision not to ship and install an order we
received from a large customer pending renegotiation of payment terms, and
the higher than expected proportion of orders for new IP-20 products during
the initial phase of the manufacturing ramp. We have reached an understanding
with the customer that will improve payment terms but also will result in
spreading shipments over a longer time period in the future. We have made good
progress during the initial phase of ramping our manufacturing for the new
products during the first quarter, and we continue to ramp production as
quickly as possible to meet the growing demand for the IP-20 products."

Supplemental revenue breakouts:

Geographical breakdown, first quarter of 2014:

  oEurope: 19%
  oAfrica: 11%
  oNorth America: 13%
  oLatin America: 30%
  oIndia: 14%
  oAPAC: 13%

A conference call will follow today, May 8, 2014, beginning at 9:00 a.m. EDT.
Investors are invited to join the Company's teleconference by calling (877)
777-1968, or international +1(612) 332-0632 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:
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: 325517. A replay
of both the call and the webcast will be available through June 8, 2014.

About Ceragon Networks Ltd.

Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless hauling 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® 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 may contain statements concerning Ceragon's future
prospects that are "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ materially,
including risks associated with increased working capital needs, the risk that
sales of Ceragon's new IP-20 products will not meet expectations, risks
associated with doing business in Latin America, including currency export
controls and recent economic concerns, the risks relating to the concentration
of our business in developing nations, the risk of significant expenses in
connection with potential contingent tax liability associated with Nera's
prior operations or facilities, 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, and 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:                                Media:
Aviram Steinhart    or  Claudia Gatlin  Yoel Knoll
+972 3 5431 443              +1 201 853 0228          +972 3 5431132 or +1 201
                                                      853 0271
avirams@ceragon.com          claudiag@ceragon.com  yoelk@ceragon.com



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)
                                                 Three months ended
                                                 March 31,
                                                 2014            2013
Revenues                                         $   70,515    $   90,097
Cost of revenues                                 54,936          62,637
Gross profit                                     15,579          27,460
Operating expenses:
Research and development, net                    10,439          11,906
Selling and marketing                            15,420          17,533
General and administrative                       5,906           6,715
Restructuring costs                              936             -
Total operating expenses                         $   32,701   $   36,154
Operating loss                                   17,122          8,694
Financial expenses, net                          8,164           4,629
Loss before taxes                                25,286          13,323
Taxes on income                                  1,677           818
Net loss                                         $  26,963     $  14,141
Basic and diluted net loss per share             $  0.51       $  0.38
Weighted average number of shares used in
computing basic and diluted net loss per         52,457,168      36,755,603
share



CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

(Unaudited)
                                                March 31,       December 31,
                                                                2013
                                                2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                       $    26,055  $    42,407
Short-term bank deposits                        396             446
Marketable securities                           -               5,499
Trade receivables, net                          129,976         131,166
Other accounts receivable and prepaid expenses  33,179          34,205
Deferred taxes, net                             6,986           7,198
Inventories                                     62,951          64,239
Total current assets                            259,543         285,160
NON-CURRENT ASSETS:
Marketable securities                           4,060           3,985
 Deferred taxes, net                          5,620           6,542
 Severance pay funds and pension              6,883           7,065
 Property and equipment, net                  35,140          35,245
 Intangible assets, net                       6,703           7,213
 Goodwill                                     15,036          14,935
 Other non-current assets                     6,995           5,826
Total non-current assets                        80,437          80,811
Total assets                                    $ 339,980      $ 365,971


LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:
Short term loans, including current maturities  $    65,032  $    46,922
of long term loan
Trade payables                                  64,841          77,979
Deferred revenues                               5,070           7,968
Other accounts payable and accrued expenses     44,282          45,526
Total current liabilities                       179,225         178,395


LONG-TERM LIABILITIES
Long term bank loan, net of current maturities  8,246           10,304
Accrued severance pay and pension               13,879          13,635
Other long term liabilities                     29,116          28,559
                                                51,241          52,498
SHAREHOLDERS' EQUITY:
Share capital:
 Ordinary shares                             141             141
Additional paid-in capital                      359,036         357,989
Treasury shares at cost                         (20,091)        (20,091)
Accumulated other comprehensive loss, net of    (1,217)         (1,569)
taxes
Accumulated deficit                             (228,355)       (201,392)
Total shareholders' equity                      109,514         135,078
Total liabilities and shareholders' equity      $   339,980   $   365,971



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)
                                                 Three months ended
                                                 March 31,
                                                 2014           2013
Cash flow from operating activities:
Net loss                                         $  (26,963)  $  (14,141)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization                    3,378          4,038
Stock-based compensation expense                 1,047          1,075
Decrease in trade and other receivables, net     1,894          23,652
Decrease in inventory, net of write-off          1,609          2,863
Decrease in deferred tax asset, net              1,317          150
Decrease in trade payables and accrued           (15,058)       (13,425)
liabilities
Decrease in deferred revenues                    (2,899)        (1,252)
Other adjustments                                841            (101)
Net cash provided by (used in) operating         $  (34,834)  $  2,859
activities
Cash flow from investing activities:
Purchase of property and equipment ,net          (2,850)        (2,895)
Investment in short and long-term bank deposits  -              (217)
Proceeds from short and long-term bank deposits  50             -
Proceeds from sale and maturities of marketable  5,161          -
securities
Net cash provided by (used in) investing         $  2,361     $  (3,112)
activities
Cash flow from financing activities:
Proceeds from exercise of options                -              1,137
Proceeds from short-term bank loans              18,110         3,000
Repayment of loans from financial institutions   (2,058)        (4,058)
Net cash provided by financing activities        $  16,052    $  79
Translation adjustments on cash and cash         $  69        $  (120)
equivalents
Decrease in cash and cash equivalents            $ (16,352)    $  (294)
Cash and cash equivalents at the beginning of    42,407         47,099
the period
Cash and cash equivalents at the end of the      $  26,055    $  46,805
period



RECONCILIATION OF NON-GAAP FINANCIAL RESULTS

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

(Unaudited)
                       Three months ended March 31,
                       2014                                        2013
                       GAAP
                       (as           Adjustments     Non-GAAP      Non-GAAP
                       reported)
Revenues               $  70,515                    $  70,515    $  90,097
Cost of revenues       54,936        (a) 866       54,070        61,342
Gross profit           15,579                        16,445        28,755
Operating expenses:
Research and           10,439        (b) 2,586    7,853         10,383
development, net
Selling and            15,420        (c) 1,015    14,405        16,110
marketing
General and            5,906         (d) 884      5,022         5,648
administrative
Restructuring costs    936           936             -             -
Total operating        $ 32,701                     $ 27,280     $ 32,141
expenses
Operating loss         17,122                        10,835        3,386
Financial expenses,    8,164         (e) 6,310    1,854         1,496
net
Loss before taxes      25,286                        12,689        4,882
Taxes on income        1,677         (f) 1,490   187           818
Net loss               $  26,963                    $  12,876    $  5,700
Basic and diluted      $   0.51                    $   0.25    $  0.16
net loss per share
Weighted average
number of shares
used in computing      52,457,168                    52,457,168    36,755,603
basic and diluted
net loss per share
Total adjustments                    14,087
(a) Cost of revenues includes $0.3 million of amortization of intangible
assets, $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 plan related costs in the three months ended March 31, 2014.

(b)Research and development expenses include $2.1 million of restructuring
plan related costs and $0.5 million of stock-based compensation expenses in
the three months ended March 31, 2014.

(c) Selling and marketing expenses include $0.2 million of amortization of
intangible assets, $0.5 million of restructuring plan related costs and $0.3
million of stock based compensation expenses in the three months ended March
31, 2014.

(d) General and administrative expenses include $0.6 million of restructuring
plan related costs and $0.3 million of stock based compensation expenses in
the three months ended March 31, 2014.

(e) Financial expenses include $4.1 million of currency devaluation in
Venezuela and $2.2 million related to certain transactions to expatriate cash
from Venezuela and Argentina in the three months ended March 31, 2014.

(f) Taxes on income include $1.5 million of non-cash tax adjustments in the
three months ended March 31, 2014.



RECONCILIATION BETWEEN REPORTED AND NON-GAAP

NET LOSS

(U.S. dollars in thousands)

(Unaudited)
                                                        Three months ended
                                                        March 31,
                                                        2014       2013
Reported GAAP net loss                                  26,963     14,141
Stock based compensation expenses                       1,047      1,075
Amortization of intangible assets                       523        666
Inventory step-up                                       -          459
Restructuring expenses                                  4,440      2,844
Changes in pre-acquisition indirect tax positions       277        264
Currency devaluation in Venezuela                       4,140      3,133
Expenses related to certain transactions to expatriate  2,170      -
cash from Venezuela and Argentina
Non-cash tax adjustments                                1,490      -
Non-GAAP net loss                                       12,876     5,700



SOURCE Ceragon Networks Ltd.

Website: http://www.ceragon.com
 
Press spacebar to pause and continue. Press esc to stop.