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12.08.2019 13:00:00
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Ceragon Networks Reports Second Quarter 2019 Financial Results
LITTLE FALLS, New Jersey, Aug. 12, 2019 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2019.
Second Quarter 2019 Highlights:
Revenues -$73.0 million, down 17.4% from the second quarter of 2018, and up 5.5% from the first quarter of 2019.
Gross margin – 36.1%, compared to 32.5% in the second quarter of 2018 and 35.6% in the first quarter of 2019.
Operating income - $4.1 million, compared to $6.4 million in the second quarter of 2018, and $3.2 million in the first quarter of 2019.
Net income - $0.8 million, or $0.01 per diluted share for the second quarter of 2019, compared to $3.2 million, or $0.04 per diluted share, in the second quarter of 2018. Net income for the first quarter of 2019 was $0.8 million, or $0.01 per diluted share.
Non-GAAP results – Gross margin was 36.1%, operating income was $4.8 million, and net income was $2.5 million, or $0.03 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents - $29.0 million at June 30, 2019, compared to $29.8 million at March 31, 2019.
"Growth in several regions accounted for the sequential increase in revenue during the second quarter, although the overall revenue level continued to reflect the delay in receiving orders from our customers in India," said Ira Palti, president and CEO of Ceragon. "We are pleased to report that, during Q2, we added new design wins for 5G in North America, Europe, and Asia Pacific which we expect to begin contributing to revenue during the second half of next year.
"Excluding India, revenue from other regions increased substantially in the first half of 2019 compared to the first half of 2018, and we expect to see this trend continue. Looking to the second half of 2019, it now appears that our revenue from India will be affected not only by the order delays but also by a slowdown in the pace of deployment activity, preventing us from reaching our net income goal and causing net income for 2019 to decline compared to 2018," Mr. Palti explained.
Supplemental geographical breakdown of revenue for the second quarter of 2019:
· Europe: | 13% |
· Africa: | 11% |
· North America: | 20% |
· Latin America: | 28% |
· India: | 10% |
· 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) 230-1085 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: https://www.ceragon.com/investors/webcasts, 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: 469750. A replay of both the call and the webcast will be available through September 12, 2019.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: 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 the risks relating to the concentration of a significant portion of Ceragon's expected business in certain geographic regions and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues, including the risks of deviations from our expectations of timing and size of orders from these customers; the risk that the current slowdown in revenue from India could extend for a longer period than anticipated: risks associated with any failure to effectively compete with other wireless equipment providers; the risk that the rollout of 5G services could take longer than anticipated; 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 2019 Results | ||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(U.S. dollars in thousands, except share and per share data) | ||||||||||||||
(Unaudited) | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues | $ | 73,001 | $ | 88,328 | $ | 142,164 | $ | 171,603 | ||||||
Cost of revenues | 46,640 | 59,579 | 91,171 | 115,250 | ||||||||||
Gross profit | 26,361 | 28,749 | 50,993 | 56,353 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development, net | 6,254 | 6,821 | 12,418 | 14,035 | ||||||||||
Selling and marketing | 10,121 | 10,369 | 19,583 | 20,931 | ||||||||||
General and administrative | 5,854 | 5,190 | 11,636 | 9,649 | ||||||||||
Total operating expenses | $ | 22,229 | $ | 22,380 | $ | 43,637 | $ | 44,615 | ||||||
Operating income | 4,132 | 6,369 | 7,356 | 11,738 | ||||||||||
Financial expenses, net | 1,830 | 2,646 | 2,939 | 4,680 | ||||||||||
Income before taxes | 2,302 | 3,723 | 4,417 | 7,058 | ||||||||||
Taxes on income | 1,398 | 497 | 2,532 | 1,762 | ||||||||||
Equity loss in affiliates | 141 | - | 314 | - | ||||||||||
Net income | $ | 763 | $ | 3,226 | $ | 1,571 | $ | 5,296 | ||||||
Basic net income per share | $ | 0.01 | $ | 0.04 | $ | 0.02 | $ | 0.07 | ||||||
Diluted net income per share | $ | 0.01 | $ | 0.04 | $ | 0.02 | $ | 0.07 | ||||||
Weighted average number of shares | 80,192,036 | 78,231,726 | 80,153,038 | 78,155,810 | ||||||||||
Weighted average number of shares | 82,051,028 | 80,850,353 | 82,192,544 | 80,457,636 | ||||||||||
Ceragon Reports Second Quarter 2019 Results | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(U.S. dollars in thousands) | ||||||
June 30, | December 31, | |||||
ASSETS | Unaudited | Audited | ||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 29,041 | $ | 35,581 | ||
Short - term bank deposits | - | 515 | ||||
Trade receivables, net | 121,449 | 123,451 | ||||
Other accounts receivable and prepaid expenses | 13,783 | 12,135 | ||||
Inventories | 73,900 | 53,509 | ||||
Total current assets | 238,173 | 225,191 | ||||
NON-CURRENT ASSETS: | ||||||
Long-term bank deposits | 29 | 504 | ||||
Deferred tax assets | 6,236 | 7,476 | ||||
Severance pay and pension fund | 5,574 | 5,096 | ||||
Property and equipment, net | 35,009 | 33,613 | ||||
Intangible assets, net | 7,670 | 6,576 | ||||
Other non-current assets | 15,822 | 4,544 | ||||
Total non-current assets | 70,340 | 57,809 | ||||
Total assets | $ | 308,513 | $ | 283,000 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Trade payables | $ | 79,431 | $ | 78,892 | ||
Deferred revenues | 3,770 | 3,873 | ||||
Short- term loans | 8,900 | - | ||||
Other accounts payable and accrued expenses | 26,385 | 27,256 | ||||
Total current liabilities | 118,486 | 110,021 | ||||
LONG-TERM LIABILITIES: | ||||||
Deferred tax liability | 24 | 28 | ||||
Accrued severance pay and pension | 10,053 | 9,711 | ||||
Deferred revenues | 6,265 | - | ||||
Other long-term payables | 9,926 | 3,672 | ||||
Total long-term liabilities | 26,268 | 13,411 | ||||
SHAREHOLDERS' EQUITY: | ||||||
Share capital: | ||||||
Ordinary shares | 215 | 214 | ||||
Additional paid-in capital | 416,835 | 415,408 | ||||
Treasury shares at cost | (20,091) | (20,091) | ||||
Other comprehensive loss | (8,016) | (9,208) | ||||
Accumulated deficits | (225,184) | (226,755) | ||||
Total shareholders' equity | 163,759 | 159,568 | ||||
Total liabilities and shareholders' equity | $ | 308,513 | $ | 283,000 | ||
Ceragon Reports Second Quarter 2019 Results | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | |||||||||||||
(U.S. dollars, in thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three months ended | Six months ended | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Cash flow from operating activities: | |||||||||||||
Net income | $ | 763 | $ | 3,226 | $ | 1,571 | $ | 5,296 | |||||
Adjustments to reconcile net income to | |||||||||||||
Depreciation and amortization | 2,318 | 1,990 | 4,438 | 3,501 | |||||||||
Stock-based compensation expense | 697 | 679 | 1,172 | 1,032 | |||||||||
Increase in trade and other receivables, | (3,797) | (292) | (10,188) | (109) | |||||||||
Decrease (increase) in inventory, net of | (6,663) | 2,561 | (20,813) | 7,049 | |||||||||
Decrease (increase) in deferred tax asset, | 646 | (64) | 1,236 | 410 | |||||||||
Increase (decrease) in trade payables and | (6,120) | (4,383) | 9,463 | (10,237) | |||||||||
Increase in long and short – term deferred | 5,774 | 856 | 6,150 | 1,796 | |||||||||
Other adjustments | (105) | (394) | (136) | (186) | |||||||||
Net cash provided by (used in) operating | $ | (6,487) | $ | 4,179 | $ | (7,107) | $ | 8,552 | |||||
Cash flow from investing activities: | |||||||||||||
Purchase of property and equipment, net | (2,716) | (658) | (6,707) | (3,957) | |||||||||
Purchase of intangible assets, net | (603) | (250) | (2,792) | (1,336) | |||||||||
Release (purchase) of long and short – | (20) | - | 920 | - | |||||||||
Net cash used in investing activities | $ | (3,339) | $ | (908) | $ | (8,579) | $ | (5,293) | |||||
Cash flow from financing activities: | |||||||||||||
Proceeds from share options exercise | 190 | 274 | 256 | 374 | |||||||||
Proceeds of short-term bank credits and | 8,900 | - | 8,900 | - | |||||||||
Net cash provided by financing activities | $ | 9,090 | $ | 274 | $ | 9,156 | $ | 374 | |||||
Translation adjustments on cash and | $ | 23 | $ | (103) | $ | (10) | $ | (112) | |||||
Increase (decrease) in cash and cash | $ | (713) | $ | 3,442 | $ | (6,540) | $ | 3,521 | |||||
Cash and cash equivalents at the beginning | 29,754 | 25,956 | 35,581 | 25,877 | |||||||||
Cash and cash equivalents at the end of | $ | 29,041 | $ | 29,398 | $ | 29,041 | $ | 29,398 | |||||
Ceragon Reports Second Quarter 2019 Results | ||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | ||||||||||||||||||||||||||||||
(U.S. dollars in thousands) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||
GAAP cost of revenues | $ | 46,640 | $ | 59,579 | $ | 91,171 | $ | 115,250 | ||||||||||||||||||||||
Stock based compensation expenses | (16) | (1) | (31) | (18) | ||||||||||||||||||||||||||
Changes in indirect tax positions | (9) | (12) | (30) | (27) | ||||||||||||||||||||||||||
Non-GAAP cost of revenues | $ | 46,615 | $ | 59,566 | $ | 91,110 | $ | 115,205 | ||||||||||||||||||||||
GAAP gross profit | $ | 26,361 | $ | 28,749 | $ | 50,993 | $ | 56,353 | ||||||||||||||||||||||
Gross profit adjustments | 25 | 13 | 61 | 45 | ||||||||||||||||||||||||||
Non-GAAP gross profit | $ | 26,386 | $ | 28,762 | $ | 51,054 | $ | 56,398 | ||||||||||||||||||||||
GAAP Research and development expenses | $ | 6,254 | $ | 6,821 | $ | 12,418 | $ | 14,035 | ||||||||||||||||||||||
Stock based compensation expenses | (98) | (67) | (201) | (127) | ||||||||||||||||||||||||||
Non-GAAP Research and development expenses | $ | 6,156 | $ | 6,754 | $ | 12,217 | $ | 13,908 | ||||||||||||||||||||||
GAAP Sales and Marketing expenses | $ | 10,121 | $ | 10,369 | $ | 19,583 | $ | 20,931 | ||||||||||||||||||||||
Stock based compensation expenses | (207) | (142) | (382) | (286) | ||||||||||||||||||||||||||
Non-GAAP Sales and Marketing expenses | $ | 9,914 | $ | 10,227 | $ | 19,201 | $ | 20,645 | ||||||||||||||||||||||
GAAP General and Administrative expenses | $ | 5,854 | $ | 5,190 | $ | 11,636 | $ | 9,649 | ||||||||||||||||||||||
Stock based compensation expenses | (376) | (469) | (558) | (601) | ||||||||||||||||||||||||||
Non-GAAP General and Administrative expenses | $ | 5,478 | $ | 4,721 | $ | 11,078 | $ | 9,048 | ||||||||||||||||||||||
GAAP financial expenses | $ | 1,830 | $ | 2,646 | $ | 2,939 | $ | 4,680 | ||||||||||||||||||||||
Leases – financial income (expenses) | (218) | - | (192) | - | ||||||||||||||||||||||||||
Non-GAAP financial expenses | $ | 1,612 | $ | 2,646 | $ | 2,747 | $ | 4,680 | ||||||||||||||||||||||
GAAP Tax expenses | $ | 1,398 | $ | 497 | $ | 2,532 | $ | 1,762 | ||||||||||||||||||||||
Non cash tax adjustments | (654) | 96 | (1,272) | (468) | ||||||||||||||||||||||||||
Non-GAAP Tax expenses | $ | 744 | $ | 593 | $ | 1,260 | $ | 1,294 | ||||||||||||||||||||||
GAAP equity loss in affiliates | $ | 141 | $ | - | $ | 314 | - | |||||||||||||||||||||||
Other non-cash adjustments | (141) | - | (314) | $ | - | |||||||||||||||||||||||||
Non-GAAP equity loss in affiliates | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||
Ceragon Reports Second Quarter 2019 Results | ||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS | ||||||||||||
(U.S. dollars in thousands, except share and per share data) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended, June 30, | Six months ended, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
GAAP net income | $ | 763 | $ | 3,226 | $ | 1,571 | $ | 5,296 | ||||
Stock based compensation | 697 | 679 | 1,172 | 1,032 | ||||||||
Changes in indirect tax positions | 9 | 12 | 30 | 27 | ||||||||
Leases – financial expenses | 218 | - | 192 | - | ||||||||
Non-cash tax adjustments | 654 | (96) | 1,272 | 468 | ||||||||
Other non-cash adjustment | 141 | - | 314 | - | ||||||||
Non-GAAP net income | $ | 2,482 | $ | 3,821 | $ | 4,551 | $ | 6,823 | ||||
GAAP basic net income per share | $ | 0.01 | $ | 0.04 | $ | 0.02 | $ | 0.07 | ||||
GAAP diluted net income per share | $ | 0.01 | $ | 0.04 | $ | 0.02 | $ | 0.07 | ||||
Non-GAAP basic and diluted net | $ | 0.03 | $ | 0.05 | $ | 0.06 | $ | 0.08 | ||||
Weighted average number of | 80,192,036 | 78,231,726 | 80,153,038 | 78,155,810 | ||||||||
Weighted average number of | 82,051,028 | 80,850,353 | 82,192,544 | 80,457,636 | ||||||||
Weighted average number of | 82,249,605 | 81,156,546 | 82,475,897 | 80,767,046 | ||||||||
Investors:
Ran Vered
+972-3-543-1595
ranv@ceragon.com
Media:
Tanya Solomon
+972-3-5431163
tanyas@ceragon.com
View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-second-quarter-2019-financial-results-300899853.html
SOURCE Ceragon Networks Ltd
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