LITTLE FALLS, New Jersey, May 6, 2019 /PRNewswire/ -- Ceragon Networks Ltd. CRNT, the #1 wireless backhaul specialist, today reported results for the first quarter ended March 31, 2019.
First Quarter 2019 Highlights
Revenues - $69.2 million, down 16.9% from the first quarter of 2018, and down 19.3% from the fourth quarter of 2018.
Gross margin - 35.6%, compared to 33.1% in the first quarter of 2018 and 34.4% in the fourth quarter of 2018.
Operating income - $3.2 million, compared to $5.4 million in the first quarter of 2018 and $6.5 million in the fourth quarter of 2018.
Net income - net income of $0.8 million, or $0.01 per diluted share for the first quarter of 2019. Net income for the first quarter of 2018 was $2.1 million, or $0.03 per diluted share. Net income for the fourth quarter of 2018 was $11.6 million or $0.14 per diluted share.
Non-GAAP results - gross margin was 35.7%, operating income was $3.7 million, and net income was $2.1 million, or $0.03 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents - $29.8 million at March 31, 2019, compared to $35.6 million at December 31, 2018.
"As we expected, first quarter results were low due to the timing of large orders from India, in addition to typical seasonal factors," said Ira Palti, president and CEO of Ceragon. "We continue to experience a high level of customer activity around the world resulting from the ongoing expansion of 4G and the beginning of the transition to 5G. This high level of customer activity, together with our expectation that we will receive a batch of large orders in Q2 related to ongoing deployments in India, causes us to believe that our quarterly revenue during the balance of 2019 is likely to be at or above the high end of our $80 to $85 million quarterly revenue run rate. Thus, we continue to expect overall revenue for 2019 to be similar to that of 2018. We are also continuing to target in 2019 a 5th consecutive year of growth in our non-GAAP net income, based on our expectation to higher gross margin from a more favorable geographic mix of revenue as well as lower financial expenses compared to 2018."
Supplemental revenue breakouts by geography:
First quarter 2019:
- Europe: | 17% |
- Africa: | 13% |
- North America: | 15% |
- Latin America: | 22% |
- India: | 15% |
- APAC | 18% |
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) 230-1074 or International: +1 (612) 288-0329, 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: https://www.ceragon.com/investors/webcasts/, and completing the registration.
If you are unable to join us live, the replay numbers are: USA: (800) 475-6701 or International +1 (320) 365-3844 Access Code: 466180. A replay of both the call and the webcast will be available through June 6, 2019.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. CRNT is the #1 wireless backhaul specialist. We help operators and other service providers worldwide smoothly evolve their networks towards 5G, while increasing operational efficiency and enhancing end customers' quality of experience, with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, that use our solutions to deliver mission-critical multimedia services and other applications at high reliability and speed.
Ceragon's unique multicore technology and wireless backhaul solutions provide highly reliable, 5G high-capacity connectivity with minimal use of spectrum, power and other resources. Our solutions enable 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. Ceragon's solutions are deployed by more than 460 service providers, as well as hundreds of private network owners, in more than 130 countries.
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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 demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, 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 relating to the concentration of a significant portion of Ceragon's business in certain geographic regions and particularly in India, where two customers currently represent a significant portion of its revenues, risks associated with a decline in demand from the single market segment on which we focus; risks associated with any failure to effectively compete with other wireless equipment providers; risk relating to certain guarantees granted by Ceragon on behalf of Orocom to FITEL, in the framework of the FITEL project; 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:
Ran Vered
+972-3-543-1595
ranv@ceragon.com
or
Claudia Gatlin
+1-212 830-9080
claudiag@ceragon.com
Media:
Tanya Solomon
+972-3-5431163
tanyas@ceragon.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(U.S. dollars in thousands, except share and per share data) | |||||||||
(Unaudited) | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2019 | 2018 | ||||||||
Revenues | $ 69,163 | $ 83,275 | |||||||
Cost of revenues | 44,531 | 55,671 | |||||||
Gross profit | 24,632 | 27,604 | |||||||
Operating expenses: | |||||||||
Research and development, net | 6,164 | 7,214 | |||||||
Selling and marketing | 9,462 | 10,562 | |||||||
General and administrative | 5,782 | 4,459 | |||||||
Total operating expenses | $ 21,408 | $ 22,235 | |||||||
Operating income | 3,224 | 5,369 | |||||||
Financial expenses, net | 1,109 | 2,034 | |||||||
Income before taxes | 2,115 | 3,335 | |||||||
Taxes on income | 1,134 | 1,265 | |||||||
Equity loss in affiliates | 173 | - | |||||||
Net income | $ 808 | $ 2,070 | |||||||
Basic net income per share | $ 0.01 | $ 0.03 | |||||||
Diluted net income per share | $ 0.01 | $ 0.03 | |||||||
Weighted average number of shares used in | 80,113,607 | 78,080,146 | |||||||
Weighted average number of shares used in | 82,333,627 | 80,065,171 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(U.S. dollars in thousands) | ||||
March 31, | December 31, | |||
2019 | ||||
ASSETS | Unaudited | Audited | ||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $ 29,754 | $ 35,581 | ||
Short - term bank deposits | - | 515 | ||
Trade receivables, net | 119,548 | 123,451 | ||
Other accounts receivable and prepaid expenses | 12,555 | 12,135 | ||
Inventories | 67,370 | 53,509 | ||
Total current assets | 229,227 | 225,191 | ||
NON-CURRENT ASSETS: | ||||
Long-term bank deposits | 90 | 504 | ||
Deferred tax assets | 6,882 | 7,476 | ||
Severance pay and pension fund | 5,378 | 5,096 | ||
Property and equipment, net | 34,287 | 33,613 | ||
Intangible assets, net | 6,931 | 6,576 | ||
Other non-current assets | 14,722 | 4,544 | ||
Total non-current assets | 68,290 | 57,809 | ||
Total assets | $ 297,517 | $ 283,000 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES: | ||||
Trade payables | $ 82,845 | $ 78,892 | ||
Deferred revenues | 4,246 | 3,873 | ||
Other accounts payable and accrued expenses | 29,281 | 27,256 | ||
Total current liabilities | 116,372 | 110,021 | ||
LONG-TERM LIABILITIES: | ||||
Deferred tax liability | 24 | 28 | ||
Accrued severance pay and pension | 9,973 | 9,711 | ||
Other long term payables | 9,315 | 3,672 | ||
Total long-term liabilities | 19,312 | 13,411 | ||
SHAREHOLDERS' EQUITY: | ||||
Share capital: | ||||
Ordinary shares | 214 | 214 | ||
Additional paid-in capital | 415,949 | 415,408 | ||
Treasury shares at cost | (20,091) | (20,091) | ||
Other comprehensive loss | (8,292) | (9,208) | ||
Accumulated deficits | (225,947) | (226,755) | ||
Total shareholders' equity | 161,833 | 159,568 | ||
Total liabilities and shareholders' equity | $ 297,517 | $ 283,000 | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||||
(U.S. dollars, in thousands) | ||||
(Unaudited) | ||||
Three months ended | ||||
March 31, | ||||
2019 | 2018 | |||
Cash flow from operating activities: | ||||
Net Income | $ 808 | $ 2,070 | ||
Adjustments to reconcile net income to net cash | ||||
provided by (used in) operating activities: | ||||
Depreciation and amortization | 2,120 | 1,511 | ||
Stock-based compensation expense | 475 | 353 | ||
Decrease (increase) in trade and other receivables, net | (6,391) | 183 | ||
Decrease (increase) in inventory, net of write-off | (14,150) | 4,488 | ||
Decrease in deferred tax asset, net | 590 | 474 | ||
Increase (decrease) in trade payables and accrued | 15,583 | (5,854) | ||
liabilities | ||||
Increase in deferred revenues | 376 | 940 | ||
Other adjustments | (31) | 208 | ||
Net cash provided by (used in) operating activities | $ (620) | $ 4,373 | ||
Cash flow from investing activities: | ||||
Purchase of property and equipment, net | (3,991) | (3,299) | ||
Purchase of intangible assets, net | (2,189) | (1,086) | ||
Release of long and short - term bank | 940 | - | ||
deposit | ||||
Net cash used in investing activities | $ (5,240) | $ (4,385) | ||
Cash flow from financing activities: | ||||
Proceeds from exercise of options | 66 | 100 | ||
Net cash provided by financing activities | $ 66 | $ 100 | ||
Translation adjustments on cash and cash equivalents | $ (33) | $ (9) | ||
Increase (decrease) in cash and cash equivalents | $ (5,827) | $ 79 | ||
Cash and cash equivalents at the beginning of the period | 35,581 | 25,877 | ||
Cash and cash equivalents at the end of the period | $ 29,754 | $ 25,956 | ||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | ||||
(U.S. dollars in thousands) | ||||
(Unaudited) | ||||
Three months ended | ||||
March 31, | ||||
2019 | 2018 | |||
GAAP cost of revenues | $ 44,531 | $ 55,671 | ||
Stock based compensation expenses | (15) | (17) | ||
Changes in indirect tax positions | (21) | (15) | ||
Non-GAAP cost of revenues | $ 44,495 | $ 55,639 | ||
GAAP gross profit | $ 24,632 | $ 27,604 | ||
Gross profit adjustments | 36 | 32 | ||
Non-GAAP gross profit | $ 24,668 | $ 27,636 | ||
GAAP Research and development expenses | $ 6,164 | $ 7,214 | ||
Stock based compensation expenses | (103) | (60) | ||
Non-GAAP Research and development expenses | $ 6,061 | $ 7,154 | ||
GAAP Sales and Marketing expenses | $ 9,462 | $ 10,562 | ||
Stock based compensation expenses | (175) | (144) | ||
Non-GAAP Sales and Marketing expenses | $ 9,287 | $ 10,418 | ||
GAAP General and Administrative expenses | $ 5,782 | $ 4,459 | ||
Stock based compensation expenses | (182) | (132) | ||
Non-GAAP General and Administrative expenses | $ 5,600 | $ 4,327 | ||
GAAP financial expenses | $ 1,109 | $ 2,034 | ||
Leases – financial income (expenses) | 26 | - | ||
Non-GAAP financial expenses | $ 1,135 | $ 2,034 | ||
GAAP taxes on income | $ 1,134 | $ 1,265 | ||
Non-cash tax adjustments | (618) | (564) | ||
Non-GAAP taxes on income | $ 516 | $ 701 | ||
GAAP equity loss in affiliates | $ 173 | $ - | ||
Other non-cash adjustments | (173) | - | ||
Non-GAAP equity loss in affiliates | $ - | $ - | ||
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, | ||||
2019 | 2018 | |||
GAAP net income | $ 808 | $ 2,070 | ||
Stock based compensation expenses | 475 | 353 | ||
Changes in indirect tax positions | 21 | 15 | ||
Leases – financial expenses (income) | (26) | - | ||
Non-cash tax adjustment | 618 | 564 | ||
Other non-cash adjustment | 173 | - | ||
$ 2,069 | $ 3,002 | |||
Non-GAAP net income | ||||
$ 0.01 | $ 0.03 | |||
GAAP basic net income per share | ||||
$ 0.01 | $ 0.03 | |||
GAAP diluted net income per share | ||||
$ 0.03 | $ 0.04 | |||
Non-GAAP basic and diluted net income per share | ||||
Weighted average number of shares used in computing | ||||
GAAP basic net income per share | 80,113,607 | 78,080,146 | ||
82,333,627 | 80,065,171 | |||
Weighted average number of shares used in computing | ||||
GAAP diluted net income per share | ||||
Weighted average number of shares used in computing | 82,701,755 | 80,377,797 | ||
View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-first-quarter-2019-financial-results-300844104.html
SOURCE Ceragon Networks Ltd
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