Ceragon Networks Reports First Quarter 2018 Financial Results
Ceragon Networks Reports First Quarter 2018 Financial Results
Strong Q1 bookings and revenue, with particular strength coming from India
LITTLE FALLS, New Jersey, May 7, 2018 /PRNewswire/ --
Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist, today reported results for the first quarter ended March 31, 2018.
First Quarter 2018 Highlights
Revenues - $83.3 million, up 9.5% from the first quarter of 2017, and down 3.9% from the fourth quarter of 2017.
Gross margin - 33.1%, compared to 29.3% in the first quarter of 2017 and 33.6% in the fourth quarter of 2017.
Operating income - $5.4 million, compared to $2.0 million in the first quarter of 2017 and $7.5 million in the fourth quarter of 2017.
Net income (loss) - net income of $2.1 million, or $0.03 per diluted share for the first quarter of 2018. Net loss for the first quarter of 2017 was $(0.1) million, or $(0.00) per diluted share. Net income for the fourth quarter of 2017 was $7.2 million or $0.09 per diluted share.
Non-GAAP results - gross margin was 33.2%, operating income was $5.7 million, and net income was $3.0 million, or $0.04 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents - $26.0 million at March 31, 2018, compared to $25.9 million at December 31, 2017.
"We are beginning 2018 with a strong quarter in all respects," said Ira Palti, president and CEO of Ceragon. "We had strong bookings in Q1, with particular strength coming from India. Revenue increased 9.5% year over year, and we now have enough visibility to raise our quarterly run rate expectations to $80 to $85 million during the balance of this year. We won several important new projects in Q1 and our objective is to continue to gradually gain market share. Our financial goal is to make 2018 the fourth consecutive year of increasing net income, despite facing some challenges with factors we can't control such as currency headwinds and shortages of passive components."
Supplemental revenue breakouts by geography:
First quarter 2018:
-- Europe: 12%
-- Africa: 2%
-- North America: 11%
-- Latin America: 13%
-- India: 46%
-- APAC: 16%
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) 398-9367 or International: +1 (612) 288-0337, 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/about-ceragon/investor-relations/events-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: 446862. A replay of both the call and the webcast will be available through June 7, 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 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.
Join the Discussion:
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Blog: http://blog.ceragon.com/blog
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-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended
March 31,
---------
2018 2017
---- ----
Revenues $83,275 $76,021
Cost of revenues 55,671 53,717
------ ------
Gross profit 27,604 22,304
------ ------
Operating expenses:
Research and development,
net 7,214 6,107
Selling and marketing 10,562 9,735
General and administrative 4,459 4,505
Total operating expenses $22,235 $20,347
------------------------ ------- -------
Operating income 5,369 1,957
Financial expenses, net 2,034 1,598
----- -----
Income before taxes 3,335 359
Taxes on income 1,265 487
----- ---
Net income (loss) $2,070 $(128)
====== =====
Basic net income (loss)
per share $0.03 $(0.00)
===== ======
Diluted net income (loss)
per share $0.03 $(0.00)
===== ======
78,080,146 77,796,425
Weighted average number of
shares used in
computing basic net income
(loss) per share
80,065,171 77,796,425
Weighted average number of
shares used in
computing diluted net
income (loss) per share
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
March 31, 2018 December 31, 2017
-------------- -----------------
ASSETS Unaudited Audited
CURRENT ASSETS:
Cash and cash equivalents $25,956 $25,877
Trade receivables, net 116,002 113,719
Other accounts receivable and prepaid expenses 14,081 17,052
Inventories 49,676 54,164
------ ------
Total current assets 205,715 210,812
-------------------- ------- -------
NON-CURRENT ASSETS:
Long-term bank deposits 996 996
Deferred tax assets 505 988
Severance pay and pension funds 5,445 5,459
Property and equipment, net 29,367 29,870
Intangible assets, net 2,656 2,199
Other non-current assets 3,506 3,269
-----
Total non-current assets 42,475 42,781
------------------------ ------ ------
Total assets $248,190 $253,593
------------ ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $63,007 $75,476
Deferred revenues 6,130 5,193
Other accounts payable and accrued expenses 28,548 24,781
------ ------
Total current liabilities 97,685 105,450
------------------------- ------ -------
LONG-TERM LIABILITIES:
Deferred tax liability 132 141
Accrued severance pay and pension 10,279 10,085
Other long term payables 4,033 4,019
----- -----
Total long-term liabilities 14,444 14,245
--------------------------- ------ ------
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares 214 214
Additional paid-in capital 411,270 410,817
Treasury shares at cost (20,091) (20,091)
Other comprehensive loss (7,601) (7,171)
Accumulated deficits (247,731) (249,871)
-------- --------
Total shareholders' equity 136,061 133,898
-------------------------- ------- -------
Total liabilities and shareholders' equity $248,190 $253,593
------------------------------------------ ======== ========
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended
March 31,
---------
2018 2017
---- ----
Cash flow from operating activities:
Net Income (loss) $2,070 $(128)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 1,511 2,345
Stock-based compensation expense 353 358
Decrease in trade and other receivables,
net 183 7,231
Decrease (increase) in inventory, net of
write-off 4,488 (4,984)
Decrease (increase) in deferred tax
asset, net 474 (15)
Increase (decrease) in trade payables and
accrued (5,854) 3,997
liabilities
Increase (decrease) in deferred revenues 940 (1,035)
Other adjustments 208 12
--- ---
Net cash provided by operating activities $4,373 $7,781
====== ======
Cash flow from investing activities:
Purchase of property and equipment, net (3,299) (2,309)
Purchase of intangible assets, net (1,086) -
Net cash used in investing activities $(4,385) $(2,309)
======= =======
Cash flow from financing activities:
Repayment of loans from financial
institutions - (5,500)
Proceeds from exercise of options 100 74
--- ---
Net cash provided by (used in) financing
activities $100 $(5,426)
==== =======
Translation adjustments on cash and cash
equivalents $(9) $76
=== ===
Increase in cash and cash equivalents $79 $122
=== ====
Cash and cash equivalents at the
beginning of the period 25,877 36,338
Cash and cash equivalents at the end of
the period $25,956 $36,460
======= =======
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,
---------
2018 2017
---- ----
GAAP cost of revenues $55,671 $53,717
Amortization of intangible assets - (303)
Stock based compensation expenses (17) (20)
Changes in pre-acquisition indirect tax positions (15) (162)
--- ----
Non-GAAP cost of revenues $55,639 $53,232
------- -------
GAAP gross profit $27,604 $22,304
Gross profit adjustments 32 485
--- ---
Non-GAAP gross profit $27,636 $22,789
------- -------
GAAP Research and development expenses $7,214 $6,107
Stock based compensation expenses (60) (78)
--- ---
Non-GAAP Research and development expenses $7,154 $6,029
------ ------
GAAP Sales and Marketing expenses $10,562 $9,735
Amortization of intangible assets - (71)
Stock based compensation expenses (144) (78)
---- ---
Non-GAAP Sales and Marketing expenses $10,418 $9,586
------- ------
GAAP General and Administrative expenses $4,459 $4,505
Stock based compensation expenses (132) (182)
---- ----
Non-GAAP General and Administrative expenses $4,327 $4,323
------ ------
GAAP taxes on income $1,265 $487
Non-cash tax adjustments (564) (98)
---- ---
Non-GAAP taxes on income $701 $389
---- ----
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,
---------
2018 2017
---- ----
GAAP net income (loss) $2,070 $(128)
Stock based compensation expenses 353 358
Amortization of intangible assets - 374
Changes in pre-acquisition indirect tax positions 15 162
Non-cash tax adjustment 564 98
--- ---
$3,002 $864
------ ----
Non-GAAP net income
GAAP basic net income (loss) per share $0.03 $(0.00)
===== ======
$0.03 $(0.00)
===== ======
GAAP diluted net income (loss) per share
$0.04 $0.01
===== =====
Non-GAAP basic and diluted net income per share
Weighted average number of shares used in computing
GAAP basic net income (loss) per share 78,080,146 77,796,425
========== ==========
80,065,171 77,796,425
========== ==========
Weighted average number of shares used in computing
GAAP diluted net income (loss) per share
Weighted average number of shares used in computing 80,377,797 80,751,956
Non-GAAP basic and diluted net income per share
Investors:
Doron Arazi or Claudia Gatlin
+972-3-5431-660 +1-212-830-9080
dorona@ceragon.com claudiag@ceragon.com
Media:
Tanya Solomon
+972-3-5431163
tanyas@ceragon.com
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SOURCE Ceragon Networks Ltd
