Ceragon Networks Reports First Quarter 2013 Financial Results

PARAMUS, N.J., May 6, 2013 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the first quarter which ended March 31, 2013.

Revenues for the first quarter of 2013 reached $90.1 million, down 18% from $110.0 million for the first quarter of 2012, and down 16% from $106.8 million in the fourth quarter of 2012.

Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2013 was $(14.1) million or $(0.38) per basic share and diluted share, compared to net loss of $(7.4) million in the first quarter of 2012, or $(0.20) per basic share and diluted share.

On a non-GAAP basis, excluding (a) $1.1 million of stock-based compensation expenses, (b) $0.7 million amortization of intangible assets, (c) $0.4 million inventory step up related to the Nera acquisition, (d) $2.8 million restructuring and other charges related to reduction in workforce (e) $0.3 million of changes in pre-acquisition indirect tax positions and (f) $3.1 million finance expenses related to a non-recurring currency devaluation in Venezuela, net loss for the first quarter was $(5.7) million, or $(0.16) per basic share and diluted share. Non-GAAP net loss for the first quarter of 2012 was $(2.2) million, or $(0.06) per basic share and diluted share (please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP).

Gross margin on a GAAP basis in the first quarter of 2013 was 30.5% of revenues. Gross margin on a non-GAAP basis was 31.9% of revenues.

Operating loss on a GAAP basis in the first quarter of 2013 was $(8.7) million. On a non-GAAP basis operating loss was $(3.4) million.

Cash and cash investments at the end of the quarter were $51.6 million.

"Our financial results for the first quarter of 2013 reflect longer sales cycles," said Ira Palti, President and CEO of Ceragon. "The outlook remains the same as we indicated on April 8^th. We are not seeing carriers cancelling or reducing the scope of their planned projects, and the delays in closing deals relate mainly to operator hesitation during a period of reevaluating business models with a network architecture transition on the horizon.

"Meanwhile, the response to our new product line from initial evaluations is very encouraging, and we expect to be able to capitalize on our leadership position beginning next year when the transition to new architectures expands beyond early adopters."

Supplemental revenue breakouts:

Geographical breakdown, first quarter of 2013:

• Europe:             19%
• Africa:               13%
• North America:   9%
• Latin America:    38%
• India:                 8%
• APAC:              13%

A conference call will follow today, May 6, 2013, beginning at 9:00 a.m. EDT. Investors are invited to join the Company's teleconference by calling (800) 230-1059, or international +1(612) 234-9960 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/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: USA - (800) 475-6701, or international- +1 (320) 365-3844, Access Code: 287910A replay of both the call and the webcast will be available through June 6, 2013.

About Ceragon Networks Ltd.

Ceragon Networks Ltd.(NASDAQ: CRNT) is the #1 wireless backhaul specialist.  We provide innovative, flexible and cost-effective wireless backhaul and fronthaul solutions that enable mobile operators and other wired/wireless service providers to deliver 2G/3G, 4G/LTE and other broadband services to their subscribers. Ceragon's high-capacity, solutions use microwave technology to transfer voice and data traffic while maximizing bandwidth efficiency, to deliver more capacity over longer distances under any deployment scenario. Based on our extensive global experience, Ceragon delivers turnkey solutions that support service provider profitability at every stage of the network lifecycle enabling faster time to revenue, cost-effective operation and simple migration to all-IP networks. As the demand for data pushes the need for ever-increasing capacity, Ceragon is committed to serve the market with unmatched technology and innovation, ensuring effective solutions for the evolving needs of the marketplace. Our solutions are deployed by more than 430 service providers in over 130 countries.

Ceragon Networks® is a registered trademark 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.

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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. Some of the factors that could significantly impact the forward-looking statements in this press release include the risk of significant expenses in connection with potential contingent tax liability associated with Nera's prior operations or facilities, risks associated with unexpected changes in customer demand, risks associated with increased working capital needs, and other risks and uncertainties, which 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's public filings are available from the Securities and Exchange Commission's website at www.sec.gov  or may be obtained on Ceragon's website at www.ceragon.com

(a) Cost of revenues includes $0.3 million of amortization of intangible assets, $0.4 million of inventory step-up, $0.3 million of changes in pre-acquisition indirect tax positions, $0.1 million of stock based compensation expenses and $0.2 million of restructuring and other charges related to reduction in workforce in the three months ended March 31, 2013.

(b)Research and development expenses include $1.2 million of restructuring and other charges related to reduction in workforce and $0.3 million of stock based compensation expenses in the three months ended March 31, 2013.

(c) Selling and marketing expenses includes $0.3 million of amortization of intangible assets, $0.7 million of restructuring and other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013.

(d) General and administrative expenses includes $0.7 million of restructuring other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013.

(e) Financial expenses includes $3.1 million non-recurring currency devaluation in Venezuela in the three months ended March 31, 2013

SOURCE Ceragon Networks Ltd.