Exhibit A
![](https://capedge.com/proxy/6-K/0001178913-10-000251/ceragon.jpg)
CERAGON NETWORKS REPORTS FOURTH QUARTER AND
YEAR-END 2009 FINANCIAL RESULTS
TEL AVIV, Israel, February 1, 2010 - - Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), the provider of high-capacity, LTE/4G-ready wireless backhaul networks, today reported results for the fourth quarter and year which ended December 31, 2009.
Revenues for the fourth quarter of 2009 were $53.4 million, down 6% from $56.8 million for the fourth quarter of 2008 and up 19% from $44.7 million in the third quarter of 2009.
Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the fourth quarter of 2009 was $2.1 million or $0.06 per basic and diluted share, compared to net income of $2.7 million in the fourth quarter of 2008, or $0.07 per basic share and diluted share.
On a non-GAAP basis, net income for the fourth quarter, excluding $1.3 million of equity-based compensation expenses, was $3.4 million, or $0.10 per basic share and $0.09 per diluted share. Non-GAAP net income for the fourth quarter of 2008 was $3.3 million, or $0.09 per basic and diluted share (please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).
Revenues for the full year of 2009 were $184.2 million, down 15% from $217.3 million in 2008. Net income on a GAAP basis for 2009 was $3.7 million or $0.11 per basic share and $0.10 per diluted share. Net income for the year 2008 was $26.0 million or $0.70 per basic share and $0.68 per diluted share including $11.2 million of tax benefit related to the initial creation of deferred tax asset in the second quarter of 2008.
On a non-GAAP basis, net income for 2009 was $7.3 million, or $0.21 per basic share and $0.20 per diluted share. Net income for the year 2008 was $17.3 million, or $0.47 per basic share and $0.45 per diluted share.
Gross margin on a GAAP basis in the fourth quarter of 2009 was 34.0% of revenues. Gross margin on a non-GAAP basis in the fourth quarter of 2009 was 34.1% of revenues.
Cash and cash investments at the end of the quarter were $98.3 million.
“The revenue growth resumed in Q3 and accelerated in Q4,” said Ira Palti, President and CEO of Ceragon. “We expect this momentum to continue during 2010, driven primarily by ongoing demand for high capacity backhaul for cellular networks. Geographically, we expect continued strength in Asia Pacific, augmented by improvement in most other regions. Increasingly, wireless carriers of all types are expecting backhaul vendors to deliver a complete network including a host of professional services. We will continue to invest, as we did in Q4, in more R&D, pre-sales, sales as well as services resources, particularly in North America, to accommodate the trend toward more turnkey projects. With continued strong focus on expense control, we expect profits to grow more rapidly than revenues, with a target of 30-35% revenue growth for 2010 over 2009.”
Supplemental revenue breakouts:
Geographical breakdown, fourth quarter of 2009:
EMEA: | 45% |
North America: | 23% |
Asia Pacific: | 27% |
Latin America: | 5% |
A conference call discussing Ceragon’s results for the fourth quarter of 2008, will take place today, February 1 2009, at 9:00 a.m. (ET). Investors are invited to join the Company’s teleconference by calling (800) 230-1096 or international (612) 332-0226 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: (800) 475-6701or international (320) 365-3844, Access Code 140552.
A replay of both the call and the webcast will be available through March 1, 2010.
- 2 - -
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) provides high capacity, LTE/4G-ready 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
Ceragon Networks®, CeraView®, FibeAir® the FibeAir® design mark and Native² 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’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.
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
(more)
- 3 - -
![](https://capedge.com/proxy/6-K/0001178913-10-000251/ceragon.jpg)
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues | $ | 53,357 | $ | 56,779 | $ | 184,220 | $ | 217,278 | ||||||||
Cost of revenues | 35,231 | 37,802 | 123,494 | 144,607 | ||||||||||||
Gross profit | 18,126 | 18,977 | 60,726 | 72,671 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 5,812 | 5,195 | 20,189 | 20,310 | ||||||||||||
Selling and marketing | 7,877 | 8,989 | 29,996 | 32,252 | ||||||||||||
General and administrative | 2,244 | 2,160 | 7,893 | 7,150 | ||||||||||||
Total operating expenses | $ | 15,933 | $ | 16,344 | $ | 58,078 | $ | 59,712 | ||||||||
Operating profit | 2,193 | 2,633 | 2,648 | 12,959 | ||||||||||||
Financial income, net | 228 | 69 | 1,496 | 2,184 | ||||||||||||
Income before taxes | 2,421 | 2,702 | 4,144 | 15,143 | ||||||||||||
Tax benefit (taxes on income) | (293 | ) | 36 | (489 | ) | 10,834 | ||||||||||
Net Income | $ | 2,128 | $ | 2,738 | $ | 3,655 | $ | 25,977 | ||||||||
Basic net earnings per share | $ | 0.06 | $ | 0.07 | $ | 0.11 | $ | 0.70 | ||||||||
Diluted net earnings per share | $ | 0.06 | $ | 0.07 | $ | 0.10 | $ | 0.68 | ||||||||
Weighted average number of shares used in computing basic net earnings per share | 34,256,957 | 36,517,147 | 34,369,212 | 36,863,684 | ||||||||||||
Weighted average number of shares used in computing diluted net earnings per share | 36,365,610 | 36,938,654 | 35,796,878 | 38,338,584 |
(more)
- 4 - -
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
December 31, 2009 | December 31, 2008 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 38,339 | $ | 28,224 | ||||
Short-term bank deposits | 30,183 | 35,044 | ||||||
Marketable securities | 16,724 | 2,187 | ||||||
Trade receivables, net | 68,452 | 70,811 | ||||||
Deferred taxes | 3,462 | 4,082 | ||||||
Other accounts receivable and prepaid expenses | 7,492 | 10,094 | ||||||
Inventories | 65,925 | 40,510 | ||||||
Total current assets | 230,577 | $ | 190,952 | |||||
LONG-TERM INVESTMENTS: | ||||||||
Long-term bank deposits | 10,824 | 8,204 | ||||||
Long-term marketable securities | 2,250 | 24,102 | ||||||
Severance pay funds | 4,971 | 4,065 | ||||||
Deferred taxes | 8,942 | 8,007 | ||||||
Total long-term investments | $ | 26,987 | $ | 44,378 | ||||
PROPERTY AND EQUIPMENT, NET | 11,809 | 8,891 | ||||||
Total assets | $ | 269,373 | $ | 244,221 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | 52,898 | 40,731 | ||||||
Deferred revenues | 18,548 | 5,886 | ||||||
Other accounts payable and accrued expenses | 9,847 | 8,041 | ||||||
Total current liabilities | $ | 81,293 | $ | 54,658 | ||||
LONG-TERM LIABILITIES | ||||||||
Accrued severance pay | $ | 7,174 | $ | 6,647 | ||||
SHAREHOLDERS' EQUITY: | ||||||||
Share capital: | ||||||||
Ordinary shares | 92 | 91 | ||||||
Additional paid-in capital | 291,736 | 285,141 | ||||||
Treasury shares at cost | (20,091 | ) | (7,923 | ) | ||||
Other comprehensive income | 100 | 193 | ||||||
Accumulated deficits | (90,931 | ) | (94,586 | ) | ||||
Total shareholders' equity | $ | 180,906 | $ | 182,916 | ||||
Total liabilities and shareholders' equity | $ | 269,373 | $ | 244,221 |
- 5 - -
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Cash flow from operating activities: | ||||||||||||||||
Net income | $ | 2,128 | $ | 2,738 | $ | 3,655 | $ | 25,977 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation | 960 | 685 | 3,283 | 2,070 | ||||||||||||
Stock-based compensation expense | 1,317 | 594 | 3,607 | 2,557 | ||||||||||||
Decrease (increase) in trade and other receivables, net | (9,751 | ) | (9,792 | ) | 4,724 | (33,411 | ) | |||||||||
Decrease (increase) in inventory | (15,755 | ) | 2,299 | (25,415 | ) | (394 | ) | |||||||||
Increase (decrease) in trade payables and accrued liabilities | 18,932 | (1,150 | ) | 14,619 | 8,116 | |||||||||||
Increase (decrease) in deferred revenues | 4,565 | 257 | 12,662 | (816 | ) | |||||||||||
Increase in deferred tax asset | (281 | ) | (241 | ) | (281 | ) | (11,353 | ) | ||||||||
Decrease in long term payable | - | - | - | (4,650 | ) | |||||||||||
Other adjustments | 374 | 108 | (42 | ) | 360 | |||||||||||
Net cash provided by (used in) operating activities | $ | 2,489 | $ | (4,502 | ) | $ | 16,812 | $ | (11,544 | ) | ||||||
Cash flow from investing activities: | ||||||||||||||||
Purchase of property and equipment ,net | (1,640 | ) | (1,956 | ) | (6,737 | ) | (5,029 | ) | ||||||||
Investment in short and long-term bank deposit | (16,214 | ) | (13,124 | ) | (44,009 | ) | (66,267 | ) | ||||||||
Proceeds from short and long-term bank deposits | 19,284 | 13,542 | 46,177 | 61,376 | ||||||||||||
Investment in held-to-maturity marketable securities | (3,203 | ) | - | (4,703 | ) | (14,851 | ) | |||||||||
Proceeds from maturities of held-to-maturity marketable securities | - | 7,450 | 11,754 | 13,500 | ||||||||||||
Net cash provided by (used in) investing activities | $ | (1,773 | ) | $ | 5,912 | $ | 2,482 | $ | (11,271 | ) | ||||||
Cash flow from financing activities: | ||||||||||||||||
Proceeds from exercise of options | 2,205 | 104 | 2,989 | 695 | ||||||||||||
Purchase of treasury shares at cost | (4,128 | ) | (7,923 | ) | (12,168 | ) | (7,923 | ) | ||||||||
Issuance costs | - | (11 | ) | - | (383 | ) | ||||||||||
Net cash used in financing activities | $ | (1,923 | ) | $ | (7,830 | ) | $ | (9,179 | ) | $ | (7,611 | ) | ||||
Increase (decrease) in cash and cash equivalents | $ | (1,207 | ) | $ | (6,420 | ) | $ | 10,115 | $ | (30,426 | ) | |||||
Cash and cash equivalents at the beginning of the period | 39,546 | 34,644 | 28,224 | 58,650 | ||||||||||||
Cash and cash equivalents at the end of the period | $ | 38,339 | $ | 28,224 | $ | 38,339 | $ | 28,224 |
- 6 - -
Ceragon Reports Fourth Quarter 2009 Results
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended December 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
GAAP (as reported) | Adjustments (*) | Non-GAAP | Non-GAAP | |||||||||||||
Revenues | $ | 53,357 | $ | 53,357 | $ | 56,779 | ||||||||||
Cost of revenues | 35,231 | 70 | 35,161 | 37,749 | ||||||||||||
Gross profit | 18,126 | 18,196 | 19,030 | |||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 5,812 | 170 | 5,642 | 5,068 | ||||||||||||
Selling and marketing | 7,877 | 316 | 7,561 | 8,752 | ||||||||||||
General and administrative | 2,244 | 761 | 1,483 | 1,983 | ||||||||||||
Total operating expenses | $ | 15,933 | $ | 14,686 | $ | 15,803 | ||||||||||
Operating profit | 2,193 | 3,510 | 3,227 | |||||||||||||
Financial income, net | 228 | 228 | 69 | |||||||||||||
Income before taxes | 2,421 | 3,738 | 3,296 | |||||||||||||
Tax benefit (taxes on income) | (293 | ) | (293 | ) | 36 | |||||||||||
Net income | $ | 2,128 | $ | 3,445 | $ | 3,332 | ||||||||||
Basic net earnings per share | $ | 0.06 | $ | 0.10 | $ | 0.09 | ||||||||||
Diluted net earnings per share | $ | 0.06 | $ | 0.09 | $ | 0.09 | ||||||||||
Weighted average number of shares used in computing basic net earnings per share | 34,256,957 | 34,256,957 | 36,517,147 | |||||||||||||
Weighted average number of shares used in computing diluted net earnings per share | 36,365,610 | 36,365,610 | 36,938,654 | |||||||||||||
Total adjustments | 1,317 | |||||||||||||||
(*) Adjustments related to equity based compensation expenses according to SFAS 123 (R) |
- 7 - -
Ceragon Reports Fourth Quarter 2009 Results
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Year ended December 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
GAAP (as reported) | Adjustments(*) | Non-GAAP | Non-GAAP | |||||||||||||
Revenues | $ | 184,220 | $ | 184,220 | $ | 217,278 | ||||||||||
Cost of revenues | 123,494 | 256 | 123,238 | 144,350 | ||||||||||||
Gross profit | 60,726 | 60,982 | 72,928 | |||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 20,189 | 643 | 19,546 | 19,724 | ||||||||||||
Selling and marketing | 29,996 | 1,185 | 28,811 | 31,245 | ||||||||||||
General and administrative | 7,893 | 1,523 | 6,370 | 6,443 | ||||||||||||
Total operating expenses | $ | 58,078 | $ | 54,727 | $ | 57,412 | ||||||||||
Operating profit | 2,648 | 6,255 | 15,516 | |||||||||||||
Financial income, net | 1,496 | 1,496 | 2,184 | |||||||||||||
Income before taxes | 4,144 | 7,751 | 17,700 | |||||||||||||
Taxes on income | 489 | 489 | 373 | |||||||||||||
Net income | $ | 3,655 | $ | 7,262 | $ | 17,327 | ||||||||||
Basic net earnings per share | $ | 0.11 | $ | 0.21 | $ | 0.47 | ||||||||||
Diluted net earnings per share | $ | 0.10 | $ | 0.20 | $ | 0.45 | ||||||||||
Weighted average number of shares used in computing basic net earnings per share | 34,369,212 | 34,369,212 | 36,863,684 | |||||||||||||
Weighted average number of shares used in computing diluted net earnings per share | 35,796,878 | 35,796,878 | 38,338,584 | |||||||||||||
Total adjustments | 3,607 | |||||||||||||||
(*) Adjustments related to equity based compensation expenses according to SFAS 123 (R) |
- 8 - -
Ceragon Reports Fourth 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
- 9 -