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Ceragon Networks Reports Second Quarter 2018 Financial Results

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Ceragon Networks Reports Second Quarter 2018 Financial Results

PR Newswire

LITTLE FALLS, New Jersey, Aug. 6, 2018 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ:CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2018.

Second Quarter 2018 Highlights:

Revenues - $88.3 million, down 5.4% from the second quarter of 2017, and up 6.1% from the first quarter of 2018.

Gross margin – 32.5%, compared to 31.3% in the second quarter of 2017 and 33.1% in the first quarter of 2018.

Operating income - $6.4 million, compared to $8.0 million in the second quarter of 2017, and $5.4 million in the first quarter of 2018.

Net income - $3.2 million, or $0.04 per diluted share for the second quarter of 2018, compared to 5.0 million, or $0.06 per diluted share, in the second quarter of 2017. Net income for the first quarter of 2018 was $2.1 million, or $0.03 per diluted share.

Non-GAAP results – Gross margin was 32.6%, operating income was $7.1 million, and net income was $3.8 million, or $0.05 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Cash and cash equivalents - $29.4 million at June 30, 2018, compared to $26.0 million at March 31, 2018.

"The second quarter contributed to a strong first half and was in line with our expectations," said Ira Palti, president and CEO of Ceragon. "Our bookings in Q2 continue to support our target quarterly revenue run rate of $80 to $85 million during the second half, and we continue to target an increase in net income for the year. We are increasingly optimistic about the longer-term outlook as we work with operators to plan and implement projects to upgrade, densify and optimize their networks on the road to full 5G deployments during the next several years."

Supplemental geographical breakdown of revenue for the second quarter of 2018:

·         Europe:

11%

·         Africa:

4%

·         North America:

10%

·         Latin America:

17%

·         India:

47%

·         APAC:           

11%

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) 230-1059 or International: +1 (612) 288-0340, 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/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: 451294. A replay of both the call and the webcast will be available through September 6, 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 a 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.

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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 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-

 

 

 

Ceragon Reports Second Quarter 2018 Results


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)




Three months ended


Six months ended



June 30,


June 30,



2018


2017


2018


2017










Revenues


$     88,328


$     93,334


$     171,603


$     169,355

Cost of revenues


59,579


64,131


115,250


117,848










Gross profit


28,749


29,203


56,353


51,507










Operating expenses:









Research and development


6,821


6,128


14,035


12,235

   Selling and marketing


10,369


10,041


20,931


19,776

   General and administrative


5,190


5,065


9,649


9,570










Total operating expenses


$     22,380


$    21,234


$      44,615


$      41,581










Operating income


6,369


7,969


11,738


9,926










Financial expenses, net


2,646


1,481


4,680


3,079










Income before taxes


3,723


6,488


7,058


6,847










Taxes on income


497


1,506


1,762


1,993










Net income


$       3,226


$       4,982


$        5,296


$        4,854










Basic net income per share


$         0.04


$         0.06


$          0.07


$          0.06

Diluted net income per share


$         0.04


$         0.06


$          0.07


$          0.06










Weighed average number of shares used in
computing basic net income per share


78,231,726


77,891,218


78,155,810


77,845,690










Weighed average number of shares used in
computing diluted net income per share


80,850,353


80,202,048


80,457,636


80,359,375

 

 

 

Ceragon Reports Second Quarter 2018 Results


CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)




June 30,


December 31,



2018


2017

ASSETS


    Unaudited


    Audited   

CURRENT ASSETS:





Cash and cash equivalents


$        29,398


$       25,877

Trade receivables, net


118,545


113,719

Other accounts receivable and prepaid expenses


10,512


17,052

Inventories


46,040


54,164

Total current assets


204,495


210,812






NON-CURRENT ASSETS:





   Long-term bank deposits


996


996

   Deferred tax assets


529


988

   Severance pay and pension fund


5,115


5,459

   Property and equipment, net


30,055


29,870

    Intangible assets, net


2,810


2,199

  Other non-current assets


3,212


3,269

Total non-current assets


42,717


42,781

Total assets


$    247,212


$      253,593

LIABILITIES AND SHAREHOLDERS EQUITY





CURRENT LIABILITIES:





Trade payables


$      63,614


$       75,476

Deferred revenues


6,357


5,193

Other accounts payable and accrued expenses


25,390


24,781

Total current liabilities


95,361


105,450






LONG-TERM LIABILITIES:





Deferred tax liability


92


141

Accrued severance pay and pension


9,555


10,085

Other long term payables


3,730


4,019

Total long-term liabilities


13,377


14,245






SHAREHOLDERS' EQUITY:





Share capital:





Ordinary shares


214


214

     Additional paid-in capital


412,223


410,817

Treasury shares at cost


(20,091)


(20,091)

Other comprehensive loss


(9,367)


(7,171)

Accumulated deficits


(244,505)


(249,871)

Total shareholders' equity


138,474


133,898






Total liabilities and shareholders' equity


$    247,212


$       253,593

 

 

 

Ceragon Reports Second Quarter 2018 Results 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2018


2017


2018


2017

Cash flow from operating activities:








Net income

$          3,226


$       4,982


$        5,296


$        4,854

Adjustments to reconcile net income to net
cash provided by operating activities:
















Depreciation and amortization

1,990


2,229


3,501


4,574

Stock-based compensation expense

679


261


1,032


619

Increase in trade and other receivables, net

(292)


(16,519)


(109)


(9,288)

    Decrease (increase) in inventory, net of








write off

2,561


(5,571)


7,049


(10,555)

    Decrease (increase) in deferred tax asset,








net

(64)


155


410


140

    Increase (decrease) in trade payables and








 accrued liabilities

(4,383)


14,778


(10,237)


18,775

Increase in deferred revenues

856


2,053


1,796


1,018

Other adjustments

(394)


(100)


(186)


(88)

Net cash provided by operating activities

$          4,179


$      2,268


$         8,552


$       10,049

 

 

Cash flow from investing activities:








Purchase of property and equipment, net

(658)


(1,196)


(3,957)


(3,505)

Purchase of intangible assets, net

(250)


-


(1,336)


-

Net cash used in investing activities

$           (908)


$     (1,196)


$        (5,293)


$        (3,505)









Cash flow from financing activities:








Proceeds from share options exercise

274


115


374


189

Repayment of bank loans

-


(3,500)


-


(9,000)

Net cash provided by (used in) financing activities

$             274


$     (3,385)


$            374


$       (8,811)









Translation adjustments on cash and cash equivalents

$            (103)


$          (60)


 

$          (112)


 

$              16

Increase (decrease) in cash and cash equivalents

$           3,442


$     (2,373)


$         3,521


$       (2,251)

Cash and cash equivalents at the beginning of the period

25,956


36,460


25,877


36,338

Cash and cash equivalents at the end of the period

$         29,398


$     34,087


$       29,398


$       34,087









 

 

 

Ceragon Reports Second Quarter 2018 Results 


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2018


2017


2018


2017

GAAP cost of revenues

$          59,579


$        64,131


$          115,250


$        117,848

Amortization of intangible assets

-


(306)


-


(609)

Stock based compensation expenses

(1)


(12)


(18)


(32)

Changes in pre-acquisition indirect tax positions

(12)


(165)


(27)


(327)

Non GAAP cost of revenues

$         59, 566


$        63,648


$          115,205


$        116,880

















GAAP gross profit

$          28,749


$         29,203


$            56,353


$          51,507

Gross profit adjustments

13


483


45


968

Non-GAAP gross profit

$          28,762


$         29,686


$            56,398


$          52,475

















GAAP Research and development expenses

$            6,821


$           6,128


$            14,035


$          12,235

Stock based compensation expenses

(67)


(45)


(127)


(123)

Non GAAP Research and development expenses

$            6,754


$           6,083


$            13,908


$          12,112

















GAAP Sales and Marketing expenses

$          10,369


$         10,041


$            20,931


$          19,776

Amortization of intangible assets

-


(74)


-


(145)

Stock based compensation expenses

(142)


(75)


(286)


(153)

Non-GAAP Sales and Marketing expenses

$          10,227


$          9, 892


$            20,645


$          19,478

















GAAP General and Administrative expenses

$            5,190


$           5,065


$              9,649


$            9,570

Stock based compensation expenses

(469)


(129)


(601)


(311)

Non-GAAP General and Administrative expenses

$            4,721


$           4,936


$              9,048


$            9,259

















GAAP Tax expenses

$               497


$           1,506


$              1,762


$            1,993

Non cash tax adjustments

96


(187)


(468)


(285)

Non-GAAP Tax expenses

$               593


$           1,319


$              1,294


$            1,708

 

 

 

Ceragon Reports Second Quarter 2018 Results 


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

June 30,


Six months ended

June 30,


2018


2017


2018


2017

GAAP net income

$            3,226


$             4,982


$              5,296


$             4,854

Amortization of intangible assets

-


380


-


754

Stock based compensation expenses

679


261


1,032


619

Changes in pre-acquisition indirect tax positions

12


165


27


327

Non-cash tax adjustments

(96)


187


468


285

Non-GAAP net income

$            3,821


$             5,975


$              6,823


$             6,839

GAAP basic net income per share

$              0.04


$               0.06


$                0.07


$               0.06

GAAP diluted net income per share

$              0.04


$               0.06


$                0.07


$               0.06

Non-GAAP basic and diluted net income per share

$              0.05


$               0.07


$                0.08


$               0.08

Weighed average number of shares used in computing








GAAP basic net income per share

78,231,726


77,891,218


78,155,810


77,845,690

Weighed average number of shares used in computing








GAAP diluted net income per share

80,850,353


80,202,048


80,457,636


80,359,375

Weighed average number of shares used in computing








Non-GAAP diluted net income per share

81,156,546


80,404,841


80,767,046


80,580,267

 

 

 

Investors:
Doron Arazi
+972-3-5431-660
dorona@ceragon.com

or

Claudia Gatlin
+1-212-830-9080
claudiag@ceragon.com  

Media:
Tanya Solomon
+972-3-5431163
tanyas@ceragon.com

 

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SOURCE Ceragon Networks Ltd

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