Ceragon Networks Reports Second Quarter 2011 Financial Results
Achieves Record Revenue of $110.4 Million
PARAMUS, New Jersey, August 8, 2011 /PRNewswire/ --
Ceragon Networks Ltd. (NASDAQ: CRNT), the premier wireless backhaul specialist today reported results for the second quarter which ended June 30, 2011.
Revenues for the second quarter of 2011 reached $110.4 million, up 81% from $60.9 million for the second quarter of 2010, and up 10% from $100.3 million in the first quarter of 2011.
Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the second quarter of 2011 was ($17.4) million or $(0.48) per basic share and diluted share, compared to net income of $2.6 million in the second quarter of 2010, or $0.07 per basic share and diluted share.
On a non-GAAP basis, net loss for the second quarter, excluding (a) $1.4 of equity-based compensation expenses, and (b)$14.4, million charges related to the Nera acquisition and integration plan, was ($1.6) million , or $(0.04) per basic share and diluted share. Non-GAAP net income for the second quarter of 2010 was $4.6 million, or $0.13 per basic 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 second quarter of 2011 was 21.4% of revenues. Gross margin on a non-GAAP basis was 31.9% of revenues.
Operating loss on a GAAP basis in the second quarter of 2011 was ($16.2) million. On a non-GAAP basis operating loss was ($470,000).
Cash and cash investments at the end of the quarter were $64.4 million.
"Our plan to move swiftly to create a single global organization is clearly paying off," said Ira Palti, President and CEO of Ceragon. "The continued progress of the integration is apparent in the second quarter revenues, which exceeded the high end of our guidance, and in our strong bookings that were again above one.
"We are creating company with balanced geographic exposure and a broad customer base with full capabilities to address new opportunities in each region around the world," continued Mr. Palti.
Supplemental revenue breakouts:
Geographical breakdown, second quarter of 2011:
- Europe: 28%
- Africa: 9%
- North America: 9%
- Latin America: 32%
- India: 3%
- APAC: 19%
A conference call will follow today, August 8, 2011, beginning at 9:00 a.m. EDT. Investors are invited to join the Company's teleconference by calling: (800) 230-1059 or international (612) 234-9959, at 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: (320) 365-3844, Access Code: 208325. A replay of both the call and the webcast will be available through September 8, 2011.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the premier wireless backhaul specialist. Ceragon's high capacity wireless backhaul solutions enable cellular operators and other wireless service providers to deliver 2G/3G and LTE/4G voice and data services that enable smart-phone applications such as Internet browsing, music and video. With unmatched technology and cost innovation, Ceragon's advanced point-to-point microwave systems allow wireless service providers to evolve their networks from circuit-switched and hybrid concepts to all IP networks. Ceragon solutions are designed to support all wireless access technologies, delivering more capacity over longer distances under any given deployment scenario. Ceragon's solutions are deployed by more than 230 service providers of all sizes, and hundreds of private networks in more than 130 countries. Visit Ceragon at http://www.ceragon.com.
Ceragon Networks® is a registered trademark of Ceragon Networks Ltd. in the United States and other countries. Other names mentioned are owned by their respective holders.
Join the discussion
http://www.linkedin.com/company/14470
http://www.facebook.com/ceragonnetworks
http://www.youtube.com/user/CeragonNetworks?feature=mhum
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 that Nera Networks and Ceragon's businesses will not be integrated successfully; the risk that any synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the Nera Networks transaction making it more difficult to maintain relationships with customers, employees or suppliers, the risk that Nera Networks business may not perform as expected, 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 http://www.sec.gov or may be obtained on Ceragon's website athttp://www.ceragon.com
Use of non-GAAP Measures:
This press release provides financial measures that exclude certain items and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these Non-GAAP financial measures provide meaningful supplemental information regarding our performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors
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,
2011 2010 2011 2010
Revenues $ 110,350 $ 60,889 $ 210,662 $ 120,576
Cost of revenues 86,716 39,420 157,444 78,731
Gross profit 23,634 21,469 53,218 41,845
Operating expenses:
Research and
development 12,660 6,919 25,117 12,192
Selling and marketing 21,003 8,959 40,188 18,141
General and
administrative 6,212 2,996 11,735 5,776
Restructuring costs - - 7,834 -
Acquisition related
costs - - 4,919 -
Total operating
expenses $ 39,875 $ 18,874 $ 89,793 $ 36,109
Operating profit (loss) (16,241) 2,595 (36,575) 5,736
Financial income
(expenses), net (312) 276 (759) 510
Income (loss) before
taxes (16,553) 2,871 (37,334) 6,246
Taxes on income 817 273 1,412 625
Net Income (loss) $ (17,370) $ 2,598 $ (38,746) $ 5,621
Basic net earnings per
share $ (0.48) $ 0.07 $ (1.08) $ 0.16
Diluted net earnings
per share $ (0.48) $ 0.07 $ (1.08) $ 0.15
Weighted average number
of shares used in
computing basic net
earnings (loss) per
share 35,983,033 34,881,532 35,794,446 34,686,410
Weighted average number
of shares used in
computing diluted net
earnings (loss) per
share 35,983,033 36,317,945 35,794,446 36,542,735
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
June 30, December 31,
2011 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 33,546 $ 37,725
Short-term bank deposits 10,991 23,357
Marketable securities 15,186 7,363
Trade receivables, net 113,978 88,074
Deferred taxes 4,446 4,057
Other accounts receivable and prepaid expenses 37,312 15,425
Inventories 103,000 65,921
Total current assets 318,459 241,922
LONG-TERM INVESTMENTS:
Long-term marketable securities 4,662 13,088
Severance pay funds 6,113 6,039
Total long-term investments 10,775 19,127
OTHER ASSETS:
Long-term receivables 5,426 -
Deferred taxes 8,408 8,829
Goodwill and intangible assets, net 48,284 1,093
Total other assets 62,118 9,922
PROPERTY AND EQUIPMENT, NET 27,351 16,211
Total assets $ 418,703 $ 287,182
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long term bank loan $ 4,116 $ -
Trade payables 64,100 40,537
Deferred revenues 36,228 20,661
Other accounts payable and accrued expenses 61,886 13,215
Total current liabilities 166,330 74,413
LONG-TERM LIABILITIES
Long term bank loan, net of current maturities 30,884 -
Accrued severance pay and pension 14,545 8,600
Other long term payables 36,915 -
82,344 8,600
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares 97 95
Additional paid-in capital 307,309 300,875
Treasury shares at cost (20,091) (20,091)
Other comprehensive income (loss) (1,671) 159
Accumulated deficits (115,615) (76,869)
Total shareholders' equity 170,029 204,169
Total liabilities and shareholders' equity $ 418,703 $ 287,182
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2011 2010 2011 2010
Cash flow from operating
activities: $ (17,370) $ 2,598 $ (38,746) $ 5,621
Net income (loss)
Adjustments to reconcile
net income to net cash
used in operating
activities:
Depreciation and
amortization 2,951 1,138 6,152 2,178
Stock-based
compensation expense 1,437 852 2,856 1,823
Decrease in trade and other
receivables, net 6,640 1,673 29,134 11,118
Decrease (increase) in
inventory 14,168 5,172 23,993 (2,652)
Decrease in trade
payables and accrued
liabilities (7,743) (11,213) (24,680) (17,985)
Decrease in deferred
revenues (12,755) (2,063) (12,765) (742)
Other adjustments 1,662 529 1,682 177
Net cash used in
operating activities $ (11,010) $ (1,314) $ (12,374) $ (462)
Cash flow from investing activities:
Purchase of property
and equipment, net (3,240) (2,577) (6,029) (5,471)
Payment for business
acquisition *) - - (42,405) -
Investment in short and
long-term bank deposit (7,589) (11,032) (9,843) (11,032)
Proceeds from short and
long-term bank deposits 10,273 12,607 24,069 19,680
Investment in
held-to-maturity
marketable securities - (3,230) - (18,339)
Proceeds from maturities
of held-to-maturity
marketable securities 23 - 4,258 4,500
Net cash used in investing
activities = $ (533) $ (4,232) $ (29,950) $ (10,662)
Cash flow from financing activities:
Proceeds from exercise
of options 284 430 3,580 3,016
Long term bank loan raised in
connection with business
acquisition - - 35,000 -
Net cash provided by
financing activities $ 284 $ 430 $ 38,580 $ 3,016
Translation adjustments on
cash and cash
equivalents $ (789) $ - $ (435) $ -
Decrease in cash and
cash equivalents $ (12,048) $ (5,116) $ (4,179) $ (8,108)
Cash and cash equivalents
at the beginning of
the period 45,594 35,347 37,725 38,339
Cash and cash equivalents
at the end of the
period $ 33,546 $ 30,231 $ 33,546 $ 30,231
*) Excluding cash and cash equivalents
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended June 30,
2011 2010
GAAP (as reported) Adjustments Non-GAAP Non-GAAP
Revenues $ 110,350 $ 110,350 $ 60,889
Cost of revenues 86,716 11,588 (a) 75,128 39,348
Gross profit 23,634 35,222 21,541
Operating expenses:
Research and development 12,660 1,207 (b) 11,453 5,585
Selling and marketing 21,003 2,273 (c) 18,730 8,607
General and
administrative 6,212 703 (d) 5,509 2,752
Total operating
expenses $ 39,875 $ 35,692 $ 16,944
Operating profit
(loss) (16,241) (470) 4,597
Financial income
(expenses), net (312) (312) 276
Income (loss) before
taxes (16,553) (782) 4,873
Taxes on income 817 817 273
Net income (loss) $ (17,370) $ (1, 599) $ 4,600
Basic net earnings
(loss) per share $ (0.48) $ (0.04) $ 0.13
Diluted net earnings
(loss) per share $ (0.48) $ (0.04) $ 0.13
Weighted average number
of shares used in
computing basic net
earnings (loss) per
share 35,983,033 35,983,033 34,881,532
Weighted average number
of shares used in
computing diluted net
earnings (loss) per
share 35,983,033 35,983,033 36,317,945
Total adjustments 15,771
- Cost of revenues includes $0.2 million of amortization of purchased intangible assets, $9.8 million of inventory step-up, $0.1 million of stock based compensation expenses and $1.5 million of on going costs in the three months ended June 30, 2011.
- Research and development expenses include $0.8 million of integration plan related costs and $0.4 million of stock based compensation expenses in the three months ended June 30, 2011.
- Selling and marketing expenses includes $0.5 million of amortization of purchased intangible assets, $1.2 million of integration plan related costs and $0.5 million of stock based compensation expenses in the three months endedJune 30, 2011.
- General and administration expenses includes, $0.2 million of integration plan related costs and $0.5 million of stock based compensation expenses in the three months ended June 30, 2011.
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Six months ended June 30,
2011 2010
GAAP (as reported) Adjustments Non-GAAP Non-GAAP
Revenues $ 210,662 $ 210,662 $ 120,576
Cost of revenues 157,444 14,483 (a) 142,961 78,593
Gross profit 53,218 67,701 41,983
Operating expenses:
Research and development 25,117 2,623 (b) 22,494 10,681
Selling and marketing 40,188 4,797 (c) 35,391 17,527
General and administrative 11,735 1,634 (d) 10,101 5,066
Restructuring costs 7,834 7,834 - -
Acquisition related costs 4,919 4,919 - -
Total operating expenses $ 89,793 $ 67,986 $ 33,274
Operating profit (loss) (36,575) (285) 8,709
Financial income
(expenses), net (759) (759) 510
Income (loss) before taxes (37,334) (1,044) 9,219
Taxes on income 1,412 1,412 625
Net income (loss) $ (38,746) $ (2,456) $ 8,594
Basic net earnings (loss)
per share $ (1.08) $ (0.07) $ 0.25
Diluted net earnings (loss)
per share $ (1.08) $ (0.07) $ 0.24
Weighted average number
of shares used in
computing basic net
earnings (loss)
per share 35,794,446 35,794,446 34,686,410
Weighted average number
of shares used in
computing diluted net
earnings (loss)
per share 35,794,446 35,794,446 36,542,735
Total adjustments 36,290
- Cost of revenues includes $0.5 million of amortization of purchased intangible assets, $11.2 million of inventory step-up, $0.1 million of stock based compensation expenses and $2.7 million of integration plan related costs in the six months ended June 30, 2011.
- Research and development expenses include $1.9 million of integration plan related costs and $0.7 million of stock based compensation expenses in the six months ended June 30, 2011.
- Selling and marketing expenses includes $0.8 million of amortization of purchased intangible assets, $2.9 million of integration plan related costs and $1.1 million of stock based compensation expenses in the six months endedJune 30, 2011.
- General and administration expenses include, $0.5 million of integration plan related costs and $1.1 million of stock based compensation expenses in the six months ended June 30, 2011.
RECONCILIATION BETWEEN REPORTED AND NON-GAAP
OPERATING LOSS
(U.S. dollars in thousands)
(Unaudited)
Three months ended Six months ended
June 30, 2011
Reported GAAP net
operating loss (16,241) (36,575)
Stock based compensation
expenses 1,437 2,856
Amortization of purchased
intangible assets 717 1,274
Inventory step up 9,837 11,281
Integration plan related costs 3,780 8,126
Restructuring costs - 7,834
Acquisition related costs - 4,919
Non-GAAP net operating loss (470) (285)
Company and Investor Contact:
Yoel Knoll
Ceragon Networks Ltd.
Tel. +1-201-853-0228
[email protected] / [email protected]
Director of Investor Relations
Ceragon Networks Ltd.
Cell (Int'l): +972(0)52-830-6419
Office (Int'l): +972(0)3-766-6419
Media Contact:
Karen Quatromoni
Rainier Communications
Tel. +1-508-475-0025 x150
[email protected]
SOURCE Ceragon Networks Ltd
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article