Ceragon Networks Reports First Quarter 2010 Financial Results
TEL AVIV, Israel, April 26, 2010 /PRNewswire-FirstCall/ -- Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), the provider of high-capacity, LTE/4G-ready wireless backhaul networks, today reported results for the first quarter which ended March 31, 2010.
Revenues for the first quarter of 2010 reached an all-time high of $59.7 million, up 36% from $43.9 million for the first quarter of 2009 and up 12% from $53.4 million in the fourth quarter of 2009.
Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2010 was $3.0 million or $0.09 per basic share and $0.08 per diluted share, compared to net income of $0.2 million in the first quarter of 2009, or $0.01 per basic and diluted share.
On a non-GAAP basis, net income for the first quarter, excluding $971,000 of equity-based compensation expenses, was $4.0 million, or $0.12 per basic share and $0.11 per diluted share. Non-GAAP net income for the first quarter of 2009 was $1.0 million, or $0.03 per basic and diluted share (please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).
Gross margin on a GAAP basis in the first quarter of 2010 was 34.1% of revenues. Gross margin on a non-GAAP basis was 34.2 % of revenues.
Cash and cash investments at the end of the quarter were $98.9 million.
"The year is off to a very strong start in part because we were able to recognize revenue from some turnkey projects earlier than originally expected," said Ira Palti, President and CEO of Ceragon. "As wireless operators move forward with 4G/LTE plans in response to accelerating growth in demand for data, they remain focused on flexible solutions that accommodate the requirements of both current and future networks. As a result, the overall business outlook continues to be positive and we remain confident in our target of 30-35% revenue growth for the year, with profits growing at a higher rate than revenues."
Supplemental revenue breakouts:
Geographical breakdown, first quarter of 2010:
EMEA: 23%
North America: 21%
Asia Pacific: 53%
Latin America: 3%
A conference call discussing Ceragon's results for the first quarter of 2010, will take place today, April 26 2010, at 9:00 a.m. (ET). Investors are invited to join the Company's teleconference by calling (800) 230-1092, or international: (651) 291-0561at 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/ir_events.asp?lang=0 selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: (800) 475-6701 or International: (320) 365-3844, Access Code: 152070.
A replay of both the call and the webcast will be available through May 26, 2010.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) is a leading provider of high capacity LTE/4G ready wireless backhaul solutions that enable cellular operators and other wireless service providers to deliver voice and data services, such as Internet browsing, music and video applications. Our wireless backhaul solutions use microwave technology to transfer large amounts of telecommunication traffic between base stations and the core of the service provider's network. Designed to enable risk-free migration from legacy to next-generation backhaul networks, our solutions provide fiber-like connectivity for circuit-switched, or SONET/SDH, networks, next generation Ethernet/Internet Protocol, or IP-based, networks, and hybrid networks that combine circuit-switched and IP-based networks. Our solutions support all wireless access technologies, including GSM, CDMA, EV-DO, HSPA, LTE and WiMAX. These solutions allow wireless service providers to cost-effectively and seamlessly evolve their network from circuit-switched and hybrid concepts to all IP thereby meeting the increasing demands by the growing numbers of subscribers and the increasing demand for mobile data services. We also provide our solutions to businesses and public institutions that operate their own private communications networks. Our solutions are deployed by more than 200 service providers of all sizes, as well as in hundreds of private networks, in more than 130 countries. More information is available at http://www.ceragon.com.
Ceragon Networks(R), CeraView(R), FibeAir(R) the FibeAir(R) design mark and Nativesquared are registered trademarks of Ceragon Network s Ltd., and Ceragon(TM), PolyView(TM), ConfigAir(TM), CeraMon(TM), EtherAir(TM), QuickAir(TM), QuickAir Partner Program(TM), QuickAir Partner Certification Program(TM), QuickAir Partner Zone(TM), EncryptAir(TM) and Microwave Fiber(TM) are trademarks of Ceragon Networks Ltd.
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 statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. These are important factors that could cause actual results to differ materially from forecasts and estimates. These risks and uncertainties, as well as others, are discussed in greater detail in Ceragon's Annual Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and Ceragon undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made.
Ceragon Reports First Quarter 2010 Results
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended
March 31,
2010 2009
Revenues $ 59,687 $ 43,902
Cost of revenues 39,311 28,831
Gross profit 20,376 15,071
Operating expenses:
Research and development 5,273 4,774
Selling and marketing 9,182 7,779
General and administrative 2,780 2,575
Total operating expenses $ 17,235 $ 15,128
Operating income (loss) 3,141 (57)
Financial income, net 234 354
Income before taxes 3,375 297
Taxes on income 352 82
Net Income $ 3,023 $ 215
Basic net earnings per
share $ 0.09 $ 0.01
Diluted net earnings per
share $ 0.08 $ 0.01
Weighted average number of
shares used in computing
basic net earnings per
share 34,489,121 34,802,987
Weighted average number of
shares used in computing
diluted net earnings per
share 36,765,358 35,324,176
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
March 31, December
2010 31, 2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 35,347 $ 38,339
Short-term bank deposits 24,343 30,183
Marketable securities 15,720 16,724
Trade receivables, net 58,143 68,452
Deferred taxes 4,003 3,462
Other accounts receivable and prepaid expenses 8,660 7,492
Inventories 73,749 65,925
Total current assets 219,965 230,577
LONG-TERM INVESTMENTS:
Long-term bank deposits 9,661 10,824
Long-term marketable securities 13,867 2,250
Severance pay funds 5,073 4,971
Deferred taxes 8,660 8,942
Total long-term investments $ 37,261 $ 26,987
PROPERTY AND EQUIPMENT, NET 13,416 11,809
Total assets $ 270,642 $ 269,373
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables 43,681 52,898
Deferred revenues 19,869 18,548
Other accounts payable and accrued expenses 12,045 9,847
Total current liabilities $ 75,595 $ 81,293
LONG-TERM LIABILITIES
Accrued severance pay $ 7,329 $ 7,174
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares 94 92
Additional paid-in capital 295,291 291,736
Treasury shares at cost (20,091) (20,091)
Other comprehensive income 332 100
Accumulated deficits (87,908) (90,931)
Total shareholders' equity $ 187,718 $ 180,906
Total liabilities and shareholders' equity $ 270,642 $ 269,373
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended
March 31,
2010 2009
Cash flow from operating activities:
Net income $ 3,023 $ 215
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 1,040 711
Stock-based compensation expense 971 789
Decrease in trade and other receivables, net 9,445 13,537
Decrease (increase) in inventory (7,824) 867
Decrease in trade payables and accrued
liabilities (6,772) (12,563)
Increase in deferred revenues 1,321 1,435
Increase in deferred tax asset (331) -
Other adjustments (21) (138)
Net cash provided by operating activities $ 852 $ 4,853
Cash flow from investing activities:
Purchase of property and equipment ,net (2,894) (2,487)
Investment in short and long-term
bank deposit - (8,460)
Proceeds from short and
long-term bank deposits 7,073 16,960
Investment in held-to-maturity
marketable securities (15,109) (1,500)
Proceeds from realized callable
held-to-maturity marketable security - 10,000
Proceeds from maturities of held-to-maturity
marketable securities 4,500 454
Net cash provided by (used in)
investing activities $ (6,430) $ 14,967
Cash flow from financing activities:
Proceeds from exercise of options 2,586 -
Purchase of treasury shares at cost - (6,422)
Net cash provided by (used in)
financing activities $ 2,586 $(6,422)
Increase (decrease) in cash and
cash equivalents $ (2,992) $ 13,398
Cash and cash equivalents at
the beginning of the period 38,339 28,224
Cash and cash equivalents at the
end of the period $ 35,347 $ 41,622
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended March 31,
2010 2009
GAAP (as reported) Adjustments (*) Non-GAAP Non-GAAP
Revenues $ 59,687 $ 59,687 $ 43,902
Cost of revenues 39,311 66 39,245 28,768
Gross profit 20,376 20,442 15,134
Operating expenses:
Research and
development 5,273 177 5,096 4,614
Selling and
marketing 9,182 262 8,920 7,473
General and
administrative 2,780 466 2,314 2,315
Total operating
expenses $ 17,235 $ 16,330 $ 14,402
Operating income 3,141 4,112 732
Financial income,
net 234 234 354
Income before taxes 3,375 4,346 1,086
Taxes on income 352 352 82
Net income $ 3,023 $ 3,994 $ 1,004
Basic net earnings
per share $ 0.09 $ 0.12 $ 0.03
Diluted net
earnings per share $ 0.08 $ 0.11 $ 0.03
Weighted average
number of shares
used in computing
basic net earnings
per share 34,489,121 34,489,121 34,802,987
Weighted
average number
of shares used
in computing
diluted net
earnings per
share 36,765,358 36,765,358 35,324,176
Total adjustments 971
(*) Adjustments related to equity based compensation expenses according
to SFAS 123 (R)
Contact: Yoel Knoll
Director of Investor Relations
Ceragon Networks Ltd.
Cell (Int'l): +972(0)52-830-6419
Office (Int'l): +972(0)3-766-6419
[email protected]
SOURCE Ceragon Networks Ltd
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