EXHIBIT A
CERAGON NETWORKS® REPORTS RECORD FIRST
QUARTER 2007 FINANCIAL RESULTS
“Strong Demand from Emerging Markets Generates Higher Revenues and Bookings”
TEL AVIV, Israel, April 30, 2007 – Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), www.ceragon.com, a leading provider of high-capacity wireless backhaul solutions, today reported results for the first quarter which ended March 31, 2007.
Revenues for the first quarter of 2007 were $33.9 million, up 59% from $21.3 million for the first quarter of 2006 and 3% from $32.9 million in the fourth quarter of 2006.
Net income in accordance with Generally Accepted Accounting Principles (GAAP) for the first quarter of 2007 was $2.6 million or $0.10 per basic share and $0.09 per diluted share. On a non-GAAP basis net income for the first quarter, excluding $390,000 of equity-based compensation expenses, was $3.0 million, or $0.11 per basic share and $0.10 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.04 per basic and diluted share in the first quarter of 2006. (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 2007 was 36.3% of revenues. On a non-GAAP basis gross margin was 36.4% of revenues.
Cash and cash equivalents, short- and long-term deposits and short- and long-term marketable securities totaled $29.5 million at March 31, 2007.
“We are pleased to report that we began the year with record results and strong bookings,” said Ira Palti, President and CEO of Ceragon. “Based on strong demand from emerging markets, particularly in the Asia Pacific region, we are revising our revenue growth target for 2007 upward from an increase of around 25% to an increase of about 30% over 2006 .”
“The need for more high-capacity wireless backhaul is being fueled by growing demand for mobile data services in the developed world, combined with growth in cellular subscribers in emerging economies. We are also benefiting from the migration to all-IP networks and broadband connectivity via WiMAX. We are leading the market with field-proven high-capacity solutions including a native IP solution as well as a multi-service solution combining native IP with native TDM capabilities on a single flexible platform. In addition to our continuous cost reduction program, we are focused on increasing our production capacity and shortening delivery times in order to address the widespread demand,” said Palti.
A conference call discussing Ceragon’s results for the first quarter of 2007, business conditions, and outlook, will take place today, April 30, 2007, at 9:00 a.m. (EDT). Investors can join the Company’s teleconference by calling (800) 230-1766 or international (612) 332-0725 at 8:50 a.m. EDT.
Investors are also invited to listen to the call live via the Internet by accessing Ceragon Networks’ website at the investors’ page: http://www.ceragon.com/site/Investor_events.asp, 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. A replay of both the call and the webcast link will be accessible through May 30, 2007.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) is a leading provider of high-capacity wireless backhaul solutions for cellular and fixed wireless operators, enterprises and government organizations. Ceragon’s modular FibeAir® product family is recognized as the gold standard for backhaul transmission and is also one of the top solutions chosen by cellular operators for SONET/SDH rings. A scalable, future-proof solution for wireless transport of broadband services, FibeAir operates across multiple frequencies for IP and SONET/SDH protocols, supporting the emerging needs of next-generation networks that are evolving to all-IP based services, including triple-play. It leads the market in IP backhaul, offering a unique, native IP solution that provides the efficient, robust connectivity required for WiFi, WiMAX and converged networks. Ceragon supports its growing base of more than 180 customers in 70 countries by operating an extensive sales network comprising 17 offices and numerous partners located around the world. More information is available at www.ceragon.com.
Ceragon Networks®, CeraView®, FibeAir® and the FibeAir®design mark are registered trademarks of Ceragon Networks Ltd., and Ceragon™, PolyView™, ConfigAir™, CeraMon™, EtherAir™, QuickAir™, QuickAir Partner Program™, QuickAir Partner Certification Program™, QuickAir Partner Zone™, EncryptAir™ and Microwave Fiber™ are trademarks of Ceragon Networks Ltd.
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Ceragon Reports First Quarter 2007 Results
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
(Unaudited)
Three months ended March 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
Revenues | $ | 33,936 | $ | 21,322 | ||||
Cost of revenues | 21,627 | 13,391 | ||||||
Gross profit | 12,309 | 7,931 | ||||||
Operating expenses: | ||||||||
Research and development | 3,490 | 3,241 | ||||||
Less: grants and participations | - | 438 | ||||||
Research and development, net | 3,490 | 2,803 | ||||||
Selling and marketing | 5,250 | 3,919 | ||||||
General and administrative | 1,119 | 1,305 | ||||||
Total operating expenses | 9,859 | 8,027 | ||||||
Operating profit (loss) | 2,450 | (96 | ) | |||||
Financial income, net | 173 | 384 | ||||||
Net income | $ | 2,623 | $ | 288 | ||||
Basic net earnings per share | $ | 0.10 | $ | 0.01 | ||||
Diluted net earnings per share | $ | 0.09 | $ | 0.01 | ||||
Weighted average number of shares used in computing basic net earnings per share | 27,600,884 | 26,458,840 | ||||||
Weighted average number of shares used in computing diluted net earnings per share | 29,148,689 | 28,027,069 | ||||||
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Ceragon Reports First Quarter 2007 Results
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
(Unaudited)
March 31, 2007 | December 31, 2006 | |||||||
---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 15,752 | $ | 10,170 | ||||
Short-term bank deposits | 2,086 | 5,364 | ||||||
Marketable securities | 6,421 | 6,578 | ||||||
Trade receivables, net | 29,546 | 27,433 | ||||||
Other accounts receivable and prepaid expenses | 5,282 | 6,925 | ||||||
Inventories | 32,122 | 27,311 | ||||||
Total current assets | 91,209 | 83,781 | ||||||
LONG-TERM INVESTMENTS: | ||||||||
Long-term bank deposits | 2,903 | 2,873 | ||||||
Long-term marketable securities | 2,385 | 4,500 | ||||||
Severance pay funds | 2,610 | 2,537 | ||||||
Total long-term investments | 7,898 | 9,910 | ||||||
PROPERTY AND EQUIPMENT, NET | 2,814 | 2,660 | ||||||
Total assets | $ | 101,921 | $ | 96,351 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 21,880 | $ | 22,147 | ||||
Deferred revenues | 7,580 | 3,739 | ||||||
Other accounts payable and accrued expenses | 10,406 | 10,627 | ||||||
Total current liabilities | $ | 39,866 | $ | 36,513 | ||||
LONG-TERM LIABILITIES | ||||||||
Accrued severance pay | 4,389 | 4,352 | ||||||
Other payables | 5,948 | 7,925 | ||||||
Total long-term liabilities | $ | 10,337 | $ | 12,277 | ||||
SHAREHOLDERS' EQUITY: | ||||||||
Share capital: | ||||||||
Ordinary shares | 69 | 68 | ||||||
Additional paid-in capital | 182,680 | 181,137 | ||||||
Other comprehensive income | 54 | 64 | ||||||
Accumulated deficits | (131,085 | ) | (133,708 | ) | ||||
Total shareholders' equity | 51,718 | 47,561 | ||||||
Total liabilities and shareholders' equity | $ | 101,921 | $ | 96,351 | ||||
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Ceragon Reports First Quarter 2007 Results
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
U.S. dollars in thousands, except share and per share data
(Unaudited)
Three months ended March 31, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||||||||
GAAP (as reported) | Adjustment (*) | Non-GAAP | Non-GAAP | |||||||||||
Revenues | $ | 33,936 | $ | 33,936 | $ | 21,322 | ||||||||
Cost of revenues | 21,627 | 29 | 21,598 | 13,322 | ||||||||||
Gross profit | 12,309 | 29 | 12,338 | 8,000 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development | 3,490 | 62 | 3,428 | 3,112 | ||||||||||
Less: grants and participations | - | - | 438 | |||||||||||
Research and development, net | 3,490 | 62 | 3,428 | 2,674 | ||||||||||
Selling and marketing | 5,250 | 148 | 5,102 | 3,742 | ||||||||||
General and administrative | 1,119 | 151 | 968 | 933 | ||||||||||
Total operating expenses | 9,859 | 361 | 9,498 | 7,349 | ||||||||||
Operating profit | 2,450 | 2,840 | 651 | |||||||||||
Financial income, net | 173 | 173 | 384 | |||||||||||
Net income | $ | 2,623 | $ | 3,013 | $ | 1,035 | ||||||||
Basic net earnings per share | $ | 0.10 | $ | 0.11 | $ | 0.04 | ||||||||
Diluted net earnings per share | $ | 0.09 | $ | 0.10 | $ | 0.04 | ||||||||
Weighted average number of shares used in computing basic net | ||||||||||||||
earnings per share | 27,600,884 | 27,600,884 | 26,458,840 | |||||||||||
Weighted average number of shares used in computing diluted net earnings per share | 29,148,689 | 29,148,689 | 28,027,069 | |||||||||||
Total adjustments | 390 | |||||||||||||
(*) Adjustments related to equity based compensation expenses according to SFAS 123 (R) |
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Ceragon Reports First Quarter 2007 Results
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. Important factors that could cause actual results to differ materially from forecasts and estimates include: Ceragon’s limited operating history and history of losses; Ceragon’s dependence on a limited number of key customers, independent manufacturers and suppliers; and the demand for Ceragon’s products and technology. 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.
Contact: Vered Shaked
Investor Relations Manager
Ceragon Networks Ltd.
Office: +972 (3) 645 5513
Mobile: +972 (52) 573 5513
vereds@ceragon.com
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