Exhibit A
CERAGON NETWORKS REPORTS THIRD QUARTER 2009
FINANCIAL RESULTS
TEL AVIV, Israel, October 26, 2009 – Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), a leading provider of high-capacity Ethernet and TDM wireless backhaul solutions, today reported results for the third quarter which ended September 30, 2009.
Revenues for the third quarter of 2009 were $44.7 million, down 23% from $58.1 million for the third quarter of 2008 and up 6% from $42.2 million in the second quarter of 2009.
Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the third quarter of 2009 was $1.1 million or $0.03 per basic share and diluted share, compared to net income of $3.5 million or $0.09 per basic and diluted share in the third quarter of 2008.
On a non-GAAP basis, net income for the third quarter, excluding $696,000 of equity-based compensation expenses, was $1.8 million, or $0.05 per basic and diluted share. Non-GAAP net income for the third quarter of 2008 was $4.2 million, or $0.11 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 third quarter of 2009 was 31.8% of revenues. Gross margin on a non-GAAP basis in the third quarter of 2009 was 31.9% of revenues.
Cash and cash investments at the end of the quarter were $99.8 million.
“As expected, Q3 reflected the beginning of a trend toward improving revenues,” said Ira Palti, President and CEO of Ceragon. “Based on strong bookings again in Q3, we expect revenue growth to continue into next year, driven by ongoing demand for high capacity backhaul for cellular networks, particularly in the Asia Pacific region. In addition, our backlog is increasing, as we win more turnkey projects and successfully expand to a wide variety of new customers.”
Supplemental revenue breakouts:
Geographical breakdown:
Third quarter 2009 | |||||
---|---|---|---|---|---|
Asia Pacific | 47 | % | |||
Europe Middle-East and Africa | 39 | % | |||
North America | 10 | % | |||
Latin America | 4 | % |
A conference call discussing Ceragon’s results for the third quarter of 2009, business conditions, outlook and guidance, will take place today, October 26, 2009, at 9:00 a.m. (EDT). Investors can join the Company’s teleconference by calling (800) 230-1096 or international (612) 332-0107 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/ir_events.asp 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 1167980.
A replay of both the call and the webcast will be available through November 26, 2009.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) is a leading provider of high capacity wireless backhaul solutions that enable wireless service providers to deliver voice and premium data services, such as Internet browsing, music and video applications. Ceragon’s wireless backhaul solutions use microwave technology to transfer large amounts of network traffic between base stations and the infrastructure at the core of the mobile network. Ceragon designs solutions to 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. Ceragon’s solutions support all wireless access technologies, including GSM, CDMA, EV-DO and WiMAX. These solutions address wireless service providers’ need to cost-effectively build-out and scale their infrastructure to meet the increasing demands placed on their networks by growing numbers of subscribers and the increasing demand for premium data services. Ceragon also provides its solutions to businesses and public institutions that operate their own private communications networks. Ceragon’s solutions are deployed by more than 150 service providers of all sizes, as well as in hundreds of private networks, in nearly 100 countries. More information is available at www.ceragon.com
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Ceragon Networks®, CeraView®, FibeAir® and the FibeAir® design mark are registered trademarks of Ceragon Network s 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.
This press release may contain statements concerning Ceragon’sfuture 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’sAnnual Report on Form 20-F andCeragon’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.
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Ceragon Reports Third Quarter 2009 Results |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended September 30 | Nine months ended September 30, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 | 2008 | 2009 | 2008 | |||||||||||
Revenues | $ | 44,715 | $ | 58,097 | $ | 130,863 | $ | 160,499 | ||||||
Cost of revenues | 30,499 | 39,786 | 88,263 | 106,805 | ||||||||||
Gross profit | 14,216 | 18,311 | 42,600 | 53,694 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development | 4,720 | 5,157 | 14,377 | 15,115 | ||||||||||
Selling and marketing | 6,973 | 8,139 | 22,119 | 23,263 | ||||||||||
General and administrative | 1,847 | 1,773 | 5,649 | 4,990 | ||||||||||
Total operating expenses | $ | 13,540 | $ | 15,069 | $ | 42,145 | $ | 43,368 | ||||||
Operating profit | 676 | 3,242 | 455 | 10,326 | ||||||||||
Financial income, net | 446 | 490 | 1,268 | 2,115 | ||||||||||
Income before taxes | 1,122 | 3,732 | 1,723 | 12,441 | ||||||||||
Tax benefit (taxes on income) | (43 | ) | (250 | ) | (196 | ) | 10,798 | |||||||
Net Income | $ | 1,079 | $ | 3,482 | $ | 1,527 | $ | 23,239 | ||||||
Basic net earnings per share | $ | 0.03 | $ | 0.09 | $ | 0.04 | $ | 0.63 | ||||||
Diluted net earnings per share | $ | 0.03 | $ | 0.09 | $ | 0.04 | $ | 0.60 | ||||||
Weighted average number of shares used | ||||||||||||||
in computing basic net earnings per | ||||||||||||||
share | 34,178,001 | 37,020,035 | 34,407,042 | 36,980,039 | ||||||||||
Weighted average number of shares used | ||||||||||||||
in computing diluted net earnings | ||||||||||||||
per share | 35,542,326 | 38,676,762 | 35,278,880 | 38,806,070 | ||||||||||
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Ceragon Reports Third Quarter 2009 Results |
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
September 30, 2009 | December 31, 2008 | |||||||
---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 39,546 | $ | 28,224 | ||||
Short-term bank deposits | 36,557 | 35,044 | ||||||
Marketable securities | 7,819 | 2,187 | ||||||
Trade receivables, net | 56,970 | 70,811 | ||||||
Deferred taxes | 3,268 | 4,082 | ||||||
Other accounts receivable and prepaid expenses | 9,368 | 11,508 | ||||||
Inventories | 50,170 | 40,113 | ||||||
Total current assets | 203,698 | $ | 191,969 | |||||
LONG-TERM INVESTMENTS: | ||||||||
Long-term bank deposits | 7,846 | 8,204 | ||||||
Long-term marketable securities | 7,999 | 24,102 | ||||||
Severance pay funds | 4,848 | 4,065 | ||||||
Deferred taxes | 8,821 | 8,007 | ||||||
Total long-term investments | $ | 29,514 | $ | 44,378 | ||||
PROPERTY AND EQUIPMENT, NET | 10,322 | 8,891 | ||||||
Total assets | $ | 243,534 | $ | 245,238 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | 34,893 | 41,748 | ||||||
Deferred revenues | 13,983 | 5,886 | ||||||
Other accounts payable and accrued expenses | 8,113 | 8,041 | ||||||
Total current liabilities | $ | 56,989 | $ | 55,675 | ||||
LONG-TERM LIABILITIES | ||||||||
Accrued severance pay | $ | 7,050 | $ | 6,647 | ||||
SHAREHOLDERS' EQUITY: | ||||||||
Share capital: | ||||||||
Ordinary shares | 91 | 91 | ||||||
Additional paid-in capital | 288,215 | 285,141 | ||||||
Treasury shares at cost | (15,963 | ) | (7,923 | ) | ||||
Other comprehensive income | 211 | 193 | ||||||
Accumulated deficits | (93,059 | ) | (94,586 | ) | ||||
Total shareholders' equity | $ | 179,495 | $ | 182,916 | ||||
Total liabilities and shareholders' equity | $ | 243,534 | $ | 245,238 | ||||
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Ceragon Reports Third Quarter 2009 Results |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 | 2008 | 2009 | 2008 | |||||||||||
Cash flow from operating activities: | ||||||||||||||
Net income | $ | 1,079 | $ | 3,482 | $ | 1,527 | $ | 23,239 | ||||||
Adjustments to reconcile net income to net cash | ||||||||||||||
used in operating activities: | ||||||||||||||
Depreciation | 852 | 529 | 2,323 | 1,385 | ||||||||||
Stock-based compensation expense | 696 | 665 | 2,290 | 1,963 | ||||||||||
Decrease (increase) in trade and other | ||||||||||||||
receivables, net | (5,348 | ) | (6,020 | ) | 15,889 | (23,619 | ) | |||||||
Increase in inventory | (8,002 | ) | (2,530 | ) | (10,057 | ) | (2,693 | ) | ||||||
Increase (decrease) in trade payables and accrued | ||||||||||||||
liabilities | 7,378 | 5,514 | (5,330 | ) | 9,211 | |||||||||
Increase (decrease) in deferred revenues | 7,932 | 2,823 | 8,097 | (1,073 | ) | |||||||||
Decrease (increase) in deferred tax asset | - | 95 | - | (11,112 | ) | |||||||||
Decrease in long term payable | - | - | - | (4,650 | ) | |||||||||
Other adjustments | (183 | ) | (15 | ) | (416 | ) | 145 | |||||||
Net cash provided by (used in) operating activities | $ | 4,404 | $ | 4,543 | $ | 14,323 | $ | (7,204 | ) | |||||
Cash flow from investing activities: | ||||||||||||||
Purchase of property and equipment ,net | (1,323 | ) | (1,179 | ) | (5,097 | ) | (3,018 | ) | ||||||
Investment in short and long-term bank deposit | (8,840 | ) | (19,569 | ) | (27,795 | ) | (53,144 | ) | ||||||
Proceeds from short and long-term bank deposits | 6,334 | 8,820 | 26,893 | 47,835 | ||||||||||
Investment in held-to-maturity marketable securities | - | (744 | ) | (1,500 | ) | (14,744 | ) | |||||||
Proceeds from maturities of held-to-maturity | ||||||||||||||
marketable securities | - | 2,000 | 11,754 | 6,050 | ||||||||||
Net cash provided by (used in) investing activities | $ | (3,829 | ) | $ | (10,672 | ) | $ | 4,255 | $ | (17,021 | ) | |||
Cash flow from financing activities: | ||||||||||||||
Proceeds from exercise of options | 569 | 316 | 784 | 591 | ||||||||||
Purchase of treasury shares at cost | - | - | (8,040 | ) | - | |||||||||
Issuance costs | - | (41 | ) | - | (372 | ) | ||||||||
Net cash provided by (used in) financing activities | $ | 569 | $ | 275 | $ | (7,256 | ) | $ | 219 | |||||
Increase (decrease) in cash and cash equivalents | $ | 1,144 | $ | (5,854 | ) | $ | 11,322 | $ | (24,006 | ) | ||||
Cash and cash equivalents at the beginning of the | ||||||||||||||
period | 38,402 | 40,498 | 28,224 | 58,650 | ||||||||||
Cash and cash equivalents at the end of the period | $ | 39,546 | $ | 34,644 | $ | 39,546 | $ | 34,644 | ||||||
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Ceragon Reports Third Quarter 2009 Results |
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended September 30, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 | 2008 | |||||||||||||
GAAP (as reported) | Adjustments (*) | Non-GAAP | Non-GAAP | |||||||||||
Revenues | $ | 44,715 | $ | 44,715 | $ | 58,097 | ||||||||
Cost of revenues | 30,499 | 62 | 30,437 | 39,719 | ||||||||||
Gross profit | 14,216 | 14,278 | 18,378 | |||||||||||
Operating expenses: | ||||||||||||||
Research and development | 4,720 | 148 | 4,572 | 4,982 | ||||||||||
Selling and marketing | 6,973 | 241 | 6,732 | 7,938 | ||||||||||
General and administrative | 1,847 | 245 | 1,602 | 1,551 | ||||||||||
Total operating expenses | $ | 13,540 | $ | 12,906 | $ | 14,471 | ||||||||
Operating profit | 676 | 1,372 | 3,907 | |||||||||||
Financial income, net | 446 | 446 | 490 | |||||||||||
Income before taxes | 1,122 | 1,818 | 4,397 | |||||||||||
Taxes on income | 43 | 43 | 159 | |||||||||||
Net income | $ | 1,079 | $ | 1,775 | $ | 4,238 | ||||||||
Basic net earnings per share | $ | 0.03 | $ | 0.05 | $ | 0.11 | ||||||||
Diluted net earnings per share | $ | 0.03 | $ | 0.05 | $ | 0.11 | ||||||||
Weighted average number of shares used in | ||||||||||||||
computing basic net earnings per share | 34,178,001 | 34,178,001 | 37,020,035 | |||||||||||
Weighted average number of shares used in | ||||||||||||||
computing diluted net earnings per share | 35,542,326 | 35,542,326 | 38,676,762 | |||||||||||
Total adjustments | 696 | |||||||||||||
(*) Adjustments related to equity based
compensation expenses according to SFAS
123 (R)
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Ceragon Reports Third Quarter 2009 Results |
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Nine months ended September 30, | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 | 2008 | |||||||||||||
GAAP (as reported) | Adjustments(*) | Non-GAAP | Non-GAAP | |||||||||||
Revenues | $ | 130,863 | $ | 130,863 | $ | 160,499 | ||||||||
Cost of revenues | 88,263 | 186 | 88,077 | 106,600 | ||||||||||
Gross profit | 42,600 | 42,786 | 53,899 | |||||||||||
Operating expenses: | ||||||||||||||
Research and development | 14,377 | 473 | 13,904 | 14,656 | ||||||||||
Selling and marketing | 22,119 | 869 | 21,250 | 22,492 | ||||||||||
General and administrative | 5,649 | 762 | 4,887 | 4,462 | ||||||||||
Total operating expenses | $ | 42,145 | $ | 40,041 | $ | 41,610 | ||||||||
Operating profit (loss) | 455 | 2,745 | 12,289 | |||||||||||
Financial income, net | 1,268 | 1,268 | 2,115 | |||||||||||
Income before taxes | 1,723 | 4,013 | 14,404 | |||||||||||
Taxes on income | 196 | 196 | 409 | |||||||||||
Net Income | $ | 1,527 | $ | 3,817 | $ | 13,995 | ||||||||
Basic net earnings per share | $ | 0.04 | $ | 0.11 | $ | 0.38 | ||||||||
Diluted net earnings per share | $ | 0.04 | $ | 0.11 | $ | 0.36 | ||||||||
Weighted average number of shares used in | ||||||||||||||
computing basic net earnings per share | 34,407,042 | 34,407,042 | 36,980,039 | |||||||||||
Weighted average number of shares used in | ||||||||||||||
computing diluted net earnings per share | 35,278,880 | 35,278,880 | 38,806,070 | |||||||||||
Total adjustments | 2,290 | |||||||||||||
(*) Adjustments related to equity based
compensation expenses according to SFAS
123 (R)
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Ceragon Reports Third Quarter 2009 Results
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
yoell@ceragon.com
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