Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Central Index Key | 0001119769 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2020 |
Entity File Number | 0-30862 |
Entity Registrant Name | CERAGON NETWORKS LTD |
Entity Incorporation, State or Country Code | IL |
Entity Address, Address Line One | 24 Raoul Wallenberg Street |
Entity Address, City or Town | Tel Aviv |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 6971920 |
Title of 12(b) Security | Ordinary Shares, Par Value NIS 0.01 |
Trading Symbol | CRNT |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Common Stock, Shares Outstanding | 81,703,366 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Auditor Attestation Flag | true |
Entity Shell Company | false |
Business Contact [Member] | |
Contact Personnel Name | Zvi Maayan |
Entity Address, Address Line One | 24 Raoul Wallenberg Street |
Entity Address, City or Town | Tel Aviv |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 6971920 |
City Area Code | 972 |
Local Phone Number | 3-543-1643 |
Contact Personnel Fax Number | 3-543-1600 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 27,101 | $ 23,939 |
Trade receivables (net of allowance for credit losses of $ 4,236 and $ 6,198 at December 31, 2019 and 2020, respectively) | 107,388 | 118,531 |
Other accounts receivable and prepaid expenses | 14,755 | 11,033 |
Inventories | 50,627 | 62,132 |
Total current assets | 199,871 | 215,635 |
NON-CURRENT ASSETS: | ||
Long-term bank deposits | 17 | 17 |
Deferred tax assets | 8,279 | 8,106 |
Severance pay and pension fund | 6,059 | 5,661 |
Operating lease right-of-use assets | 6,780 | 10,128 |
Other non-current assets | 13,548 | 7,579 |
PROPERTY AND EQUIPMENT, NET | 31,748 | 34,865 |
INTANGIBLE ASSETS, NET | 6,117 | 7,898 |
Total long-term assets | 72,548 | 74,254 |
Total assets | 272,419 | 289,889 |
CURRENT LIABILITIES: | ||
Trade payables | 63,722 | 59,635 |
Deferred revenues | 3,492 | 1,734 |
Short-term loans | 5,979 | 14,600 |
Operating lease liabilities | 3,183 | 5,644 |
Other accounts payable and accrued expenses | 24,048 | 22,755 |
Total current liabilities | 100,424 | 104,368 |
LONG-TERM LIABILITIES: | ||
Accrued severance pay and pensions | 11,601 | 10,709 |
Deferred revenues | 7,495 | 6,265 |
Operating lease liabilities | 3,840 | 4,718 |
Other long-term payables | 2,933 | 3,408 |
Total long-term liabilities | 25,869 | 25,100 |
SHAREHOLDERS' EQUITY: | ||
Share capital - Ordinary shares of NIS 0.01 par value - Authorized: 120,000,000 shares at December 31, 2019 and 2020; Issued: 84,144,328 and 85,184,889 shares at December 31, 2019 and 2020, respectively; Outstanding: 80,662,805 and 81,703,366 shares at December 31, 2019 and 2020, respectively | 218 | 215 |
Additional paid-in capital | 420,958 | 418,062 |
Treasury shares at cost - 3,481,523 ordinary shares as of December 31, 2019 and 2020 | (20,091) | (20,091) |
Accumulated other comprehensive loss | (8,068) | (8,666) |
Accumulated deficit | (246,891) | (229,099) |
Total shareholders' equity | 146,126 | 160,421 |
Total liabilities and shareholders' equity | $ 272,419 | $ 289,889 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)shares | Dec. 31, 2020₪ / shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019₪ / shares |
Statement of Financial Position [Abstract] | ||||
Trade receivables, allowance for credit losses | $ | $ 6,198 | $ 4,236 | ||
Ordinary shares, par value | ₪ / shares | ₪ 0.01 | ₪ 0.01 | ||
Ordinary shares, shares authorized | 120,000,000 | 120,000,000 | ||
Ordinary shares, shares issued | 85,184,889 | 84,144,328 | ||
Ordinary shares, shares outstanding | 81,703,366 | 80,662,805 | ||
Treasury stock, ordinary shares | 3,481,523 | 3,481,523 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenues | $ 262,881 | $ 285,583 | $ 343,874 |
Cost of revenues | 187,236 | 188,741 | 227,705 |
Gross profit | 75,645 | 96,842 | 116,169 |
Operating expenses: | |||
Research and development, net | 30,997 | 26,793 | 28,180 |
Selling and marketing | 33,021 | 39,469 | 42,961 |
General and administrative | 19,199 | 23,278 | 18,884 |
Total operating expenses | 83,217 | 89,540 | 90,025 |
Operating income (loss) | (7,572) | 7,302 | 26,144 |
Financial expenses and others, net | 5,923 | 6,521 | 6,349 |
Income (loss) before taxes on income | (13,495) | 781 | 19,795 |
Taxes on income (benefit) | 2,618 | 2,476 | (3,251) |
Equity loss in affiliates | 979 | 649 | |
Net income (loss) | $ (17,092) | $ (2,344) | $ 23,046 |
Net Income (loss) per share: | |||
Basic net income (loss) per share | $ (0.21) | $ (0.03) | $ 0.29 |
Diluted net income (loss) per share | $ (0.21) | $ (0.03) | $ 0.28 |
Weighted average number of ordinary shares used in computing basic net income (loss) per share | 81,149,687 | 80,296,581 | 78,579,013 |
Weighted average number of ordinary shares used in computing diluted net income (loss) per share | 81,149,687 | 80,296,581 | 81,021,527 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (17,092) | $ (2,344) | $ 23,046 |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment | (929) | (360) | (1,150) |
Cash flow hedges: | |||
Change in net unrealized gains (losses) | 1,752 | 1,797 | (2,260) |
Amounts reclassified into net income (loss) | (225) | (895) | 1,373 |
Net change | 1,527 | 902 | (887) |
Other comprehensive income (loss), net | 598 | 542 | (2,037) |
Total of comprehensive income (loss) | $ (16,494) | $ (1,802) | $ 21,009 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional paid-in Capital [Member] | Treasury shares at cost [Member] | Accumulated other comprehensive loss [Member] | Accumulated deficit [Member] | Total | |
Balance at Dec. 31, 2017 | $ 214 | $ 410,817 | $ (20,091) | $ (7,171) | $ (249,871) | $ 133,898 | |
Balance, shares at Dec. 31, 2017 | 78,045,192 | ||||||
Cumulative effect of the new revenue recognition standard | 70 | 70 | |||||
Exercise of options and vesting of RSU's | [1] | 2,611 | 2,611 | ||||
Exercise of options and vesting of RSU's, shares | 2,044,466 | ||||||
Share-based compensation expense | 1,980 | 1,980 | |||||
Other comprehensive income (loss), net | (2,037) | (2,037) | |||||
Net income (loss) | 23,046 | 23,046 | |||||
Balance at Dec. 31, 2018 | $ 214 | 415,408 | (20,091) | (9,208) | (226,755) | 159,568 | |
Balance, shares at Dec. 31, 2018 | 80,089,658 | ||||||
Exercise of options and vesting of RSU's | $ 1 | 601 | 602 | ||||
Exercise of options and vesting of RSU's, shares | 573,147 | ||||||
Share-based compensation expense | 2,053 | 2,053 | |||||
Other comprehensive income (loss), net | 542 | 542 | |||||
Net income (loss) | (2,344) | (2,344) | |||||
Balance at Dec. 31, 2019 | $ 215 | 418,062 | (20,091) | (8,666) | (229,099) | $ 160,421 | |
Balance, shares at Dec. 31, 2019 | 80,662,805 | 80,662,805 | |||||
Cumulative effect of adoption of ASU Topic 326 | (700) | $ (700) | |||||
Exercise of options and vesting of RSU's | $ 3 | 1,234 | 1,237 | ||||
Exercise of options and vesting of RSU's, shares | 1,040,561 | ||||||
Share-based compensation expense | 1,662 | 1,662 | |||||
Other comprehensive income (loss), net | 598 | 598 | |||||
Net income (loss) | (17,092) | (17,092) | |||||
Balance at Dec. 31, 2020 | $ 218 | $ 420,958 | $ (20,091) | $ (8,068) | $ (246,891) | $ 146,126 | |
Balance, shares at Dec. 31, 2020 | 81,703,366 | 81,703,366 | |||||
[1] | Represent an amount lower than $1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (17,092) | $ (2,344) | $ 23,046 |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 12,861 | 9,691 | 7,758 |
Share-based compensation expense | 1,662 | 2,053 | 1,980 |
Decrease (increase) in accrued severance pay and pensions, net | 488 | 271 | (11) |
Decrease (increase) in trade receivables, net | 9,345 | 4,533 | (11,098) |
Decrease (increase) in other accounts receivable and prepaid expenses (including other long-term assets) | (6,661) | (2,086) | 4,624 |
Decrease in operating lease right-of-use assets | 5,121 | 5,348 | |
Decrease (increase) in inventories | 9,919 | (9,475) | (956) |
Increase (decrease) in trade payables | 1,953 | (15,933) | 2,340 |
Increase (decrease) in deferred revenues | 2,988 | 4,150 | (650) |
Increase in deferred tax assets, net | (173) | (258) | (6,601) |
Decrease in operating lease liability | (5,112) | (5,114) | |
Increase (decrease) in other accounts payable and accrued expenses (including other long-term liabilities) | 1,946 | (3,767) | 2,062 |
Net cash provided by (used in) operating activities | 17,245 | (12,931) | 22,494 |
Cash flows from investing activities: | |||
Purchase of property and equipment, net | (6,077) | (11,592) | (10,303) |
Purchase of intangible assets, net | (412) | (3,274) | (3,412) |
Proceeds from bank deposits | 1,002 | 48 | |
Investment in shares | (1,628) | ||
Net cash used in investing activities | (6,489) | (13,864) | (15,295) |
Cash flows from financing activities: | |||
Proceeds from (repayment of) bank credits and loans, net | (8,621) | 14,600 | |
Proceeds from exercise of stock options | 1,237 | 602 | 2,611 |
Net cash provided by (used in) financing activities | (7,384) | 15,202 | 2,611 |
Translation adjustments on cash and cash equivalents | (210) | (49) | (106) |
Increase (decrease) in cash and cash equivalents | 3,162 | (11,642) | 9,704 |
Cash and cash equivalents at the beginning of the year | 23,939 | 35,581 | 25,877 |
Cash and cash equivalents at the end of the year | 27,101 | 23,939 | 35,581 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 3,003 | 3,833 | 1,617 |
Cash paid for interest on bank loans | $ 1,137 | $ 1,796 | $ 1,752 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. Ceragon Networks Ltd. ("the Company") is a leading global wireless backhaul specialist and an enabler of the The Company's solutions support all wireless access technologies, including 4G (LTE- Advance, LTE) and 5G services. The Company's systems also serve evolving network architectures including all-IP long haul networks, positioning the company as a key enabler of the 5G evolution. The Company sells its products through a direct sales force, systems integrators, distributors and original equipment manufacturers. The Company's wholly owned subsidiaries provide research and development, marketing, manufacturing, distribution, sales and technical support to the Company's customers worldwide. As to principal markets and major customers, see notes 17b and 17c. b. Investment in Compass Network Ltd: In December 2017, the Company signed software license agreement with Compass Networks LTD (“Compass”) in the amount of $ 500 and additional agreement for the purpose of developing Disaggregate Microwave products in August 2018, in an amount of up to $ 1,500 (out of which $ 1,300 was capitalized). In addition, the Company signed loan agreements with Compass in the amount of $ 538, which bear an annual interest rate of 10%. In December 2018, the Company purchased 14% of the share capital of Compass for a consideration of $ 833. In December 2019, the holding was decreased to 11% as a result of third-party equity investment. A total investment (including loans) in the amount of $ 1,628 was recorded under other non-current assets. As of December 31, 2020, the investment amount decreased to zero as a result of equity losses and the intangible assets of $ 1,800 were fully written-off. To date, the Company does not expect future economic benefits from this asset, inter alia, due to 5G new market requirements (see note 6). |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES a. Basis of presentation: The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). b. Use of estimates: The preparation of financial statements, in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgment, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The duration, scope and effects of the ongoing COVID-19 pandemic, government and other third party responses to it, and the related macroeconomic effects, including to the Company’s business and the business of the Company’s suppliers and customers are uncertain, rapidly changing and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to this evolving situation. Such changes could result in future impairments of intangibles, fair values of stock-based awards, inventory write-off, warranty provision, income taxes, contingent liabilities, and incremental credit losses on receivables, or an increase in the Company’s insurance liabilities as of the time of a relevant measurement event. c. Financial statements in U.S. dollars: A majority of the revenues of the Company and certain of its subsidiaries are generated in U.S. dollars ("dollars"). In addition, a substantial portion of the Company's and certain of its subsidiaries' costs is incurred in dollars. Since management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate and considers the non-U.S. subsidiaries to be a direct, integral extension of the parent company's operations, the dollar is its functional and reporting currency. Accordingly, amounts in currencies other than U.S dollars have been re-measured in accordance with ASC topic 830, "Foreign Currency Matters" ("ASC 830") as follows: Monetary balances - at the exchange rate in effect on the balance sheet date. Consolidated statements of operations items - average exchange rates prevailing during the year. All exchange gains and losses from the re-measurement mentioned above are reflected in the statement of operations in financial expenses and others, net. F - 14 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The financial statements of the Company's Brazilian subsidiary, whose functional currency is not the dollar, have been re-measured and translated into dollars. All amounts on the balance sheets have been translated into the dollar using the exchange rates in effect on the relevant balance sheet dates. All amounts in the statements of operations have been translated into the dollar using the average exchange rate for the relevant periods. The resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. d. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries ("the Group"). Intercompany balances and transactions including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. e. Cash equivalents: Cash equivalents include short-term unrestricted, highly liquid investments that are readily convertible to cash and with original maturities of three months or less, at acquisition. f. Long-term bank deposits: Long-term bank deposits are deposits with an original maturity of more than twelve months from the date of investment and which do not meet the definition of cash equivalents. g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued products, and for market prices lower than cost, if any. The Company periodically evaluates the quantities on hand relative to historical and projected sales volume (which is determined based on an assumption of future demand and market conditions) and the age of the inventory. At the point of the loss recognition, a new lower cost basis for that inventory is established. In addition, if required, the Company records a liability for firm non-cancelable and unconditional purchase commitments with contract manufacturers for quantities in excess of the Company's future demands forecast consistent with its valuation of excess and obsolete inventory. Inventory includes costs of products delivered to customers and not recognized as cost of sales, where revenues in the related arrangements were not recognized. Cost is determined for all types of inventory using the moving average cost method plus indirect costs. F - 15 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) h. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers, manufacturing and peripheral equipment 6 – 33 Office, furniture and equipment Mainly 15 Leasehold improvements Over the shorter of the term of the lease or useful life of the asset i. Impairment of long-lived assets: The Company's long-lived assets are reviewed for impairment in accordance with ASC topic 360," Property Plant and Equipment", ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During 2018, 2019 and 2020, no impairment losses have been recognized. j. Income taxes: The Company account for income taxes in accordance with ASC topic 740, "Income Taxes", ("ASC 740"). This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and for carry forward losses deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized. For more information see note 15e. The Company accounts for uncertain tax positions in accordance with ASC No. 740, "Income Taxes", ("ASC 740"). ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company elected to classify interest expenses and penalties recognized in the financial statements as income taxes. For more information see note 15i. F - 16 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) k. Intangible assets, net: Intangible assets consist of technology and incurred software development costs capitalized in accordance with ASC 985-20, "Software - Costs of Software to be Sold, Leased, or Marketed". Intangible assets that are considered to have definite useful life are amortized using the straight-line basis over their estimated useful lives. l. Revenue recognition: The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer tangible products, network roll-out, professional services and customer support, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to rebates and adjustments to determine the net consideration to which the Company expects to receive. As the Company’s standard payment terms are less than one year, the contracts have no significant financing component. The Company allocates the transaction price to each distinct performance obligation based on their relative standalone selling price. Revenue from tangible products is recognized at a point in time when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied). The revenues from customer support and extended warranty is recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. Revenues from network roll-out and professional services are recognized when the Company's performance obligation is satisfied, usually upon customer acceptance. The Company accounts for rebates and stock rotations provided to customers as variable consideration, based on historical analysis of credit memo data, rebate plans and stock rotation arrangements, as a deduction from revenue in the period in which the revenue is recognized. F - 17 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) m. Research and development expenses, net: Research and development expenses, net of government grants, are charged to the statement of operations as incurred, except for development expenses which were capitalized in accordance with ASC 985-20 "Software – Costs of Software to be Sold, Leased, or Marketed" (see k above). n. Warranty costs: The Company generally offers a standard limited warranty, including parts and labor for an average period of 1-3 years for its products. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. The Company recorded income (expenses) from decrease (increase) of warranty provision for the years ended December 31, 2018, 2019 and 2020 in the amount of $ (83), $ 654 and $ 178, respectively. As of December 31, 2019 and 2020, the warranty provision was $ 1,452 and $ 1,274, respectively. o. Derivative instruments: The Company has instituted a foreign currency cash flow hedging program using foreign currency forward and option contracts ("derivative instruments") in order to hedge the exposure to variability in expected future cash flows resulting from changes in related foreign currency exchange rates. These transactions are designated as cash flow hedges, as defined under ASC topic 815, "Derivatives and Hedging". ASC 815 requires companies to recognize all of their derivative instruments as either assets or liabilities in the financial statements at fair value. The Company measured the fair value of the contracts in accordance with ASC topic 820, "Fair value Measurement and Disclosures" at Level 2 (see also note 2t). The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. F - 18 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments that don’t meet the definition of a hedge, the changes in the fair value are included immediately in earnings in “Financial expenses and others, net”, in each reporting period. The Company's cash flow hedging program is to hedge against the risk of overall changes in cash flows resulting from forecasted foreign currency of salary and rent payments during the year. The Company hedges portions of its forecasted expenses denominated in NIS with forward exchange contracts. p. Concentrations of credit risk: Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. The majority of the Company's cash and cash equivalents are maintained in U.S. dollar. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. Management believes that the financial institutions that hold the Company's and its subsidiaries' cash and cash equivalents are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these assets. The Company's trade receivables are geographically diversified and derived from sales to customers all over the world. The Company and its subsidiaries generally do not require collateral; however, in certain circumstances, the Company and its subsidiaries may require letters of credit, additional guarantees or advance payments. The Company and its subsidiaries perform ongoing credit evaluations of their customers and insure certain trade receivables under credit insurance policies. q. Transfers of financial assets: ASC 860 "Transfers and Servicing", ("ASC 860"), establishes a standard for determining when a transfer of financial assets should be accounted for as a sale. The Company's arrangements are such that the underlying conditions are met for the transfer of financial assets to qualify for accounting as a sale. The transfers of financial assets are typically performed by the factoring of receivables to two financial institutions. F - 19 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) As of December 31, 2019, and 2020, the Company sold trade receivables to several different financial institutions in a total net amount of $ 10,422 and $ 21,993, respectively. Control and risk of those trade receivables were fully transferred in accordance with ASC 860. During the years ended on December 31, 2018, 2019 and 2020, the Company recorded amounts of $ 585, $ 506 and $ 575, respectively, as financial expense related to its factoring arrangements. r. Severance pay: The Company's severance pay liability for its Israeli employees is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for all of its employees in Israel is covered by monthly deposits with pension funds, insurance policies and an accrual. The value of the funds deposited into pension funds and insurance policies is recorded as an asset - severance pay fund - in the Company's balance sheet. The severance pay fund includes the deposited funds and accumulated adjustments to the Israeli Consumer Price Index up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds in insurance policies, is based on the cash surrendered value of these policies and includes profits / losses. Starting April 2009, the Company's agreements with new employees in Israel are under section 14 of the Severance Pay Law -1963. The Company's contributions for severance pay shall replace its severance obligation, no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to employees once the deposit amounts have been paid. As of December 2019 and 2020, accrued severance pay amounted to $ 8,539 and $ 9,282 respectively. Severance expense for the years ended December 31, 2018, 2019 and 2020, amounted to approximately $ 2,107, $ 2,336 and $ 2,538, respectively. The Company accounts for its obligations for pension and other postretirement benefits in accordance with ASC 715, "Compensation - Retirement Benefits". For more information refer to note 11. F - 20 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) s. Accounting for stock-based compensation: ASC topic 718, "Compensation - Stock Compensation", ("ASC 718"), requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations. The Company estimates the fair value of stock options granted under ASC 718 using the binomial model with the following assumptions for 2018, 2019 and 2020: December 31, 2018 2019 2020 Dividend yield 0% 0% 0% Volatility 53%-62% 53%-65% 60%-85% Risk free interest 1.8%-2.9% 1.2%-2.7% 0.1%-1.0% Early exercise multiple 2.0-2.3 1.3-2.3 1.5-1.6 Risk-free interest rates are based on the yield from U.S. Treasury zero-coupon bonds with a term equivalent to the contractual life of the options; volatility of price of the Company's shares based upon actual historical stock price movements. The Early exercise factor is representing the value of the underlying stock as a multiple of the exercise price of the option which, if achieved, results in exercise of the option. Early exercise multiple is based on actual historical exercise activity. The expected term of the options granted is derived from output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The Company recognizes compensation expense using the accelerated method for all awards ultimately expected to vest. Estimated forfeitures are based on historical pre-vesting forfeitures and on management's estimates. ASC topic 718 requires forfeitures to be estimated and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. t. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures". Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. F - 21 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The following methods and assumptions were used by the Company and its subsidiaries in estimating their fair value disclosures for financial instruments: The carrying amounts of cash and cash equivalents, trade receivables, other accounts receivable, trade payables, and other accounts payable and accrued expenses approximate their fair values due to the short-term maturities of such instruments. The derivative instruments are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. F - 22 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) u. Comprehensive income: The Company accounts for comprehensive income in accordance with ASC topic 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in stockholders' equity during the period except those resulting from investments by, or distributions to, stockholders. The components of accumulated other comprehensive income - (“AOCI”) were as follows: Unrealized Gains (Losses) on Cash Flow Hedges Foreign Currency Translation Adjustments Total Balance as of January 1, 2020 $ 318 $ (8,984 ) $ (8,666 ) Other comprehensive income before reclassifications 1,752 (929 ) 823 Amounts reclassified from AOCI (225 ) - (225 ) Other comprehensive income 1,527 (929 ) 598 Balance as of December 31, 2020 $ 1,845 $ (9,913 ) $ (8,068 ) The effects on net income of amounts reclassified from AOCI for the year ended December 31, 2020 derive from realized gains on cash flow hedges, included in operating expenses. v. Treasury shares: The Company repurchased its ordinary shares on the open-market and holds such shares as Treasury shares. The Company presents the cost of repurchased treasury shares as a reduction of shareholders' equity. w. Basic and diluted net earnings per share: Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC topic 260, "Earnings Per Share" ("ASC 260"). The total weighted average number of shares related to the outstanding options and RSU's excluded from the calculations of diluted net earnings per share due to their anti-dilutive effect was 2,426,689, 3,473,312 and 4,204,381 for the years ended December 31, 2018, 2019 and 2020, respectively. F - 23 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) x. Equity method investment Investments in companies that are not controlled but over which the Company can exercise significant influence are presented using the equity method of accounting. y. Impact of recently issued Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The new accounting standard became effective for the Company beginning January 1, 2020. The adoption of the standard had an impact on the Company’s consolidated financial statements and related disclosures. Please refer to note 10. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted the provisions of this update as of January 1, 2020 with no material impact on its consolidated financial statements. |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets [Abstract] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 3:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2019 2020 Government authorities $ 5,168 $ 5,726 Deferred charges and prepaid expenses 3,639 5,743 Deposits receivable 532 504 Advances to suppliers 357 230 Hedging asset 372 1,937 Other 965 615 $ 11,033 $ 14,755 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4:- INVENTORIES December 31, 2019 2020 Raw materials $ 18,211 $ 19,764 Work in progress 349 194 Finished products 43,572 30,669 $ 62,132 $ 50,627 During the years ended December 31, 2018, 2019 and 2020, the Company recorded inventory write-offs for excess inventory and slow-moving inventory in a total amount of $ 2,814, $ 4,836 and $ 2,919, respectively that have been included in cost of revenues. As of December 31, 2020, the Company has an outstanding inventory purchase orders with its suppliers in the amount of $ 20,750. The commitments are due primarily within one year. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5:- PROPERTY AND EQUIPMENT, NET December 31, 2019 2020 Cost: Computers, manufacturing, peripheral equipment $ 120,796 $ 125,097 Office furniture and equipment 1,925 1,959 Leasehold improvements 1,716 1,564 124,437 128,620 Accumulated depreciation: Computers, manufacturing, peripheral equipment 86,892 94,294 Office furniture and equipment 1,577 1,500 Leasehold improvements 1,103 1,078 89,572 96,872 Depreciated cost $ 34,865 $ 31,748 Depreciation expenses for the years ended December 31, 2018, 2019 and 2020 were $ 7,758, $ 9,555 and $ 10,668 respectively. Changes of property and equipment not resulted in cash outflows as of December 31, 2019 and 2020 amounted of $ 1,058 and $ 1,562. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6:- INTANGIBLE ASSETS, NET Intangible assets: The following table sets forth the components of intangible assets: December 31, 2019 2020 Original amounts: Technology $ 5,155 $ 3,767 Software development costs 2,879 2,879 8,034 6,646 Accumulated amortization: Software development costs 136 529 Net amounts: Technology 5,155 3,767 Software development costs 2,743 2,350 Intangible assets, net $ 7,898 $ 6,117 Technology includes mainly perpetual software licenses to be used in the Company's research and development activities. During 2020, the Company purchased $ 412 technology, out of which $ 18 was not resulted in cash flow outflows as of December 31, 2020. Some of the software license agreements provide a commitment of the Company for royalties payments upon future sales of the related developed products. Software development costs are amortized over 7 years. Amortization expenses for the years ended December 31, 2018, 2019 and 2020 amounted to $ 0, $ 136 and $ 393, respectively. During 2020, technology related to Compass in an amount of $ 1,800, was fully written off (see Note 1b). |
OTHER ACCOUNTS PAYABLE AND ACCR
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2019 2020 Employees and payroll accruals $ 12,321 $ 12,617 Provision for warranty costs 1,452 1,274 Government authorities 2,071 1,612 Accrued expenses 3,675 2,879 Advanced payments from customers 1,731 4,351 Hedging Liability 112 281 Other 1,393 1,034 $ 22,755 $ 24,048 |
CREDIT LINES
CREDIT LINES | 12 Months Ended |
Dec. 31, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
CREDIT LINES | NOTE 8:- CREDIT LINES In March 2013, the Company was provided with a revolving Credit Facility by four financial institutions. The Credit Facility was renewed and amended several times during the past years according to Company's needs and financial position. In June 2020, the Company signed the latest amendment to the agreement in the frame of which the Credit Facility was extended by 1 year, till June 30, 2021. Furthermore, the amendment includes a decrease in bank guarantees credit lines of $15,000 to $70,000, an increase in Credit Facility for loans of $10,000 to $50,000. In addition, $60,000 in allowed letter of credit discounting activities with three specific customers and $20,000 in receivables factoring permitted under the agreement, have remained unchanged. The amendment also includes changes in definitions in the Credit Facility agreement related to insolvency and bankruptcy conditions. As of December 31, 2020, the Company has utilized $5,000 of the $ 50,000 credit line available for short term loans. During 2020, the credit lines carry interest rates in the range of Libor+2.1% and Libor+2.6%. The Credit Facility is secured by a floating charge over all Company assets as well as several customary fixed charges on specific assets. Repayment could be accelerated by the financial institutions in certain events of default including in insolvency events, failure to comply with financial covenants or an event in which a current or future shareholder acquires control (as defined under the Israel Securities Law) of the Company. The credit agreement contains financial and other covenants requiring that the Company maintains, among other things, minimum shareholders' equity value and financial assets, a certain ratio between its shareholders' equity (excluding total intangible assets) and the total value of its assets (excluding total intangible assets) on its balance sheet, a certain ratio between its net financial debt to each of our working capital and accounts receivable. As of December 31, 2020 and 2019, the Company met all of its covenants. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | NOTE 9:- DERIVATIVE INSTRUMENTS The Company enters into foreign currency forward and option contracts with financial institutions to protect against the exposure to changes in exchange rates of several foreign currencies that are associated with forecasted cash flows and existing assets and liabilities. The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. F - 27 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 9:- DERIVATIVE INSTRUMENTS (Cont.) The fair value of derivative contracts in the consolidated balance sheets at December 31, 2020 and December 31, 2019 were as follows: Other accounts receivable and prepaid expenses Other accounts payable and accrued expenses December 31, 2020 Derivatives designated as hedging instruments Currency forward contracts $ 1,847 $ 2 Derivatives not designated as hedging instruments Currency forward and option contracts $ 90 $ 279 Total derivatives $ 1,937 $ 281 Other accounts receivable and prepaid expenses Other accounts payable and accrued expenses December 31, 2019 Derivatives designated as hedging instruments Currency forward contracts $ 318 $ - Derivatives not designated as hedging instruments Currency forward and option contracts $ 55 $ 112 Total derivatives $ 373 $ 112 The notional amounts for derivatives contracts were as follows: December 31, 2019 December 31, 2020 Derivatives designated as hedging instruments Currency forward contracts $ 29,621 $ 35,089 Derivatives not designated as hedging instruments Currency forward and option contracts $ 28,532 $ 31,207 The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is up to 12 months. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains or losses from contracts that were not designated as hedging instruments are recognized in "financial expenses and others, net". F - 28 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 9:- DERIVATIVE INSTRUMENTS (Cont.) The effect of derivative contracts on the consolidated statements of operations for the year ended December 31, 2019 and 2020 was as follows: Year ended December 31, 2019 2020 Operating income (expenses) $ 895 $ 225 Financial income (expenses) $ (207 ) $ (894 ) The following table sets forth the Company’s net assets that were measured at fair value as of December 31, 2019 and December 31, 2020, by level within the fair value hierarchy: Fair value measurements using input type Fair value hierarchy December 31, 2019 December 31, 2020 Derivatives instruments Level 2 $ 260 $ 1,655 Total net assets $ 260 $ 1,655 |
CREDIT LOSSES
CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
CREDIT LOSSES | NOTE 10:- CREDIT LOSSES Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, based on a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The Company recorded a cumulative-effect adjustment to its retained earnings as of January 1, 2020 in the amount of $700. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. F - 29 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 10:- CREDIT LOSSES (Cont.) The Company is exposed to credit losses primarily through sales to customers. The Company’s expected loss allowance methodology for trade receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status. The estimate of amount of trade receivable that may not be collected is based on the geographic location of the trade receivable balances, aging of the trade receivable balances, the financial condition of customers and the Company’s historical experience with customers in similar geographies. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables to present the net amount expected to be collected: Year ended December 31, 2020 Balance, at beginning of period $ 4,236 Cumulative effect of adoption of ASU Topic 326 700 Provision for expected credit losses 1,636 Amounts written off charged against the allowance and others (374 ) Balance, at end of period $ 6,198 |
PENSION LIABILITIES, NET
PENSION LIABILITIES, NET | 12 Months Ended |
Dec. 31, 2020 | |
Liability, Defined Benefit Plan [Abstract] | |
PENSION LIABILITIES, NET | NOTE 11:- PENSION LIABILITIES, NET The Norwegian subsidiary Ceragon Networks AS (formerly "Nera Networks AS") has defined contribution schemes and four unfunded pension plans. Under the defined contributions scheme Ceragon Networks AS makes a payment to the insurance company who administer the fund on behalf of the employee. Ceragon Networks AS has no liabilities relating to such schemes after the payment to the insurance company. As of December 31, 2020, all active employees are in this scheme. The contribution and the corresponding social security taxes are recognized as payroll expenses in the period to which the employee's services are rendered. The defined pension contribution schemes meet the requirements of the law on compulsory occupational pension. Defined benefit scheme was stopped for admission from December 1, 2007, and persons that were employed after that date were automatically entered into the defined contribution scheme. The schemes give right to defined future benefits. These are mainly dependent on the number of qualifying employment years, salary level at pension age, and the amount of benefits from the national insurance scheme. The commitment related to the pension scheme is covered through an insurance company. F - 30 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- PENSION LIABILITIES, NET (Cont.) AFP-scheme - in force from 1 January 2011, the AFP-scheme is a defined benefit multi-enterprise scheme, but is recognized in the accounts as a defined contribution scheme until reliable and sufficient information is available for the group to recognize its proportional share of pension cost, pension liability and pension funds in the scheme. Ceragon Networks AS's liabilities are therefore not recognized as liability in the balance sheet. The liabilities in respect of Ceragon Networks AS's unfunded pension plans together represent 100% of the PBO (Projected Benefit Obligation) of the entire group. The following tables provide a reconciliation of the changes in the plans' benefits obligation for the year ended December 31, 2019, and the statement of funds status as of December 31, 2020: December 31, 2019 2020 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 2,177 $ 2,368 Service cost 12 - Interest cost 47 53 Expenses paid (203 ) (201 ) Exchange rates differences (26 ) 49 Actuarial loss 361 241 Projected benefit obligation at end of year $ 2,368 $ 2,510 The assumptions used in the measurement of the Company' benefits obligations as of December 31, 2019 and 2020 are as follows: December 31, 2019 2020 Weighted-average assumptions Discount rate 2.30 % 1.70 % Rate of compensation increase 2.25 % 2.25 % The amounts reported for net periodic pension costs and the respective benefit obligation amounts are dependent upon the actuarial assumptions used. The Company reviews historical trends, future expectations, current market conditions and external data to determine the assumptions. The discount rate is the covered bond. For purposes of calculating the 2020 net periodic benefit cost and the 2020 benefit obligation, the Company has used a discount rate of 1.70%. The rate of compensation increase is determined by the Company, based upon its long-term plans for such increases. The following table provides the components of net periodic benefits cost for the years ended December 31, 2018, 2019 and 2020: December 31, 2018 2019 2020 Components of net periodic benefit cost Service cost $ 16 $ 12 $ - Interest cost 47 47 53 Net periodic benefit cost $ 63 $ 59 $ 53 F - 31 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 11:- PENSION LIABILITIES, NET (Cont.) Benefit payments are expected to be paid as follows: December 31, 2020 2021 $ 191 2022 164 2023 156 2024 149 2025 and thereafter 1,850 $ 2,510 Regarding the policy for amortizing actuarial gains or losses for pension and post-employment plans, the Company has chosen to charge the actuarial gains or losses to statement of operations. Interest cost and actuarial gain or losses are presented in financial expenses and others, net. For the years ended December 31, 2018, 2019 and 2020, an actuarial loss of $ 97, $ 361 and $ 241 respectively, was recognized in "finance expenses and others, net". |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 12:- COMMITMENTS AND CONTINGENT LIABILITIES a. Leases See Note 13 “Leases” for lease related commitments as of December 31, 2020. b. During 2018, 2019 and 2020, the Company received several grants from the Israeli Innovation Authority ("IIA"). The c. Paycheck Protection Program Loan: In May 2020, the Company received $979 in proceeds from an approved loan under the Paycheck Protection Program. Interest will accrue on outstanding principal balance at a rate of 1%, computed on a simple interest basis. The loan principal and accrued interest will be eligible for forgiveness provided that (i) the Company uses the loan proceeds exclusively for allowed costs including payroll, employee group health benefits, rent and utilities and (ii) employee and compensation levels are maintained. As of December 31, 2020, the Company has used the full amount of the loan for authorized uses as described above. If the loan is not forgiven, the loan will have up to two years maturity, at which F - 32 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) time any unpaid principal and accrued interest will be due and payable. The loan is under “short term loans” in the consolidated balance sheet as of December 31, 2020. d. Charges and guarantees: As of December 31, 2019 and 2020, the Company provided bank guarantees in an aggregate amount of $ 74,116 and $ 45,847 (including bank guarantee disclosed in Note 12e), respectively, with respect to tender offer guarantees, financial guarantees, warranty guarantees and performance guarantees to its customers. e. In September 2018, the Company signed commercial agreements with Orocom, a new operator in Peru, to provide After signing the commercial agreements mentioned above and an operating agreement with Orocom and its shareholders, the Company provided, in the second quarter of 2018, bank guarantees amounting to $29,100, on behalf of Orocom to Pronatel, to secure the return of a down payment to be received by Orocom, or part of it, in case Orocom fails to meet the down payment related obligations. These bank guarantees came into effect in July 2018, when a down payment of $29,100 was received by Orocom. During the first quarter of 2020 the bank guarantees were returned to the Company. For more information see Note 19. f. Litigations: The Company is currently involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. On January 6, 2015 the Company was served with a motion to approve a purported class action, naming the Company, its Chief Executive Officer and its directors as defendants. The motion was filed with the District Court of Tel-Aviv (the “Court”). The purported class action alleges breaches of duties by making false and misleading statements in the Company's SEC filings and public statements. The plaintiff seeks specified compensatory damages in a sum of up to $75,000 as well as attorneys’ fees and costs. The Company filed its defense on June 21, 2015, which was followed by disclosure proceedings by both parties. The plaintiff filed his reply to the Company’s defense by April 2, 2017. A preliminary hearing was held on May 22, 2017, in the framework of which the court set dates for response to the Company’s above-mentioned requests as well as dates for evidence hearings. F - 33 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) In May 2017, the Company filed two requests: the first, requesting to dismiss the plaintiff’s response to the Company’s defense, or, alternatively, to allow the Company to respond to it; the second, to continue discussions with regards to the legal question of the governing law. On July 17, 2017, the court issued its decision in the first request, denying the requested dismissal of plaintiff’s response to the Company’s defense, but allowing the Company to respond to it; on July 29, 2017, the Court issued its decision in the second request, and denied it. The Company filed its response on September 18, 2017. On October 2, 2017, the plaintiff filed a request to summon two of the Company’s officers (Company's Chairman, Mr. Zisapel and Company's Chief Executive Officer, Mr. Palti). The first evidence hearing took place on November 2, 2017and the second and final evidence hearing took place on January 8, 2018. Summaries were filed by the plaintiff on March 21, 2018 and the Company filed its summaries on June 12, 2018. The plaintiff filed their reply summaries on September 5, 2018. On October 4, 2018, an interim decision regarding dual listed companies, which corresponds with the Company’s arguments in this case, was rendered by the Supreme Court of Israel. This Supreme court decision upholds two recent rulings of District Court of Tel-Aviv (Economic Department), which determined that all securities litigation regarding dual listed companies should be decided only in accordance with US law (herein after: “Supreme Court Decision”). In light of this, on October 15, 2018, the plaintiff asked from court to add a plea to his summaries. The court has approved plaintiff’s request and gave to the defendants the right to reply. In accordance, the Company’s response was submitted on December 4, 2018. Plaintiff’s reply to Company’s response was submitted on December 26, 2018. On April 14, 2019 the court rendered a decision resolving that according to Supreme Court Decision, examination of the legal questions standing in the basis of the Motion, should be based upon US law. Therefore, the court allowed the plaintiff to amend its Motion within 45 days, so that it would include an expert opinion regarding US law, and an argument regarding US law implementation in the specific circumstances. The Court also decided that amendment of the Motion is subject to plaintiff’s payment of 40,000 NIS to the Company. On September 23, 2019, the plaintiff filed an amended Motion (“the Amended Motion”), which includes an expert opinion regarding US federal law. Moreover. The Amended Motion includes lengthy arguments that were added on top of the original Motion, specifically, in reference to discovery proceedings and evidence hearings that were held as part of the original Motion. F - 34 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 12:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) Therefore, on September 25, 2019, the Court rendered a decision pointing out that the Amended motion seems to include the plaintiff’s summaries in the Amended Motion, and so ordered the plaintiff to clarify whether he is willing to relinquish submitting any additional summaries regarding the evidence that were heard in the original Motion. On October 2, 2019, plaintiff responded, alleging that since the Amended Motion does not include any new facts, there is no need in submitting additional summaries regarding the evidence that were heard to this point. On December 30, 2019 the Company submitted a motion to dismiss the Amended Motion. The Company alleged that the Amended Motion includes new causes of action, and specifically that the addition of legal causes of action according to US Federal law, cannot be filed due to the specific statute of limitations. On January 20, 2020, the plaintiff filed its response. Also, the Court accepted the Company’s request to submit its response to the Amended Motion after a decision in the Company’s motion to dismiss will be rendered. On February 24, 2020 the court issued a decision, according to which, the Motion will be decided upon the current court documents, unless either of the parties will file a request to hold a hearing in the matter. As neither of parties requested to hold such a hearing, the parties await the Court’s decision in the matter. The Company believes it has strong defense arguments; Therefore, its current assessment is that it is not probable, that the Court will accept the motion for class action. To date, the Company is not a party to any other material legal proceedings. Nonetheless, the Company is negotiating a dispute with one of its customers and should the parties fail to reach an amicable settlement, it might lead to a threatened or actual litigation. Albeit the amount under dispute is not material, the Company is exposed to the risk that the said customer shall unlawfully pursue the exercise of a bank guarantee held by it at the amount exceeding the true amount in dispute and which could be material to the Company. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 13:- LEASES The Company`s leases include offices and warehouses for its facilities worldwide, as well as car leases, which are all classified as operating leases. Certain leases include renewal options that are under the Company`s sole discretion. The renewal options were included in the right of use (“ROU”) and liability calculation if it was reasonably certain that the Company will exercise the option. F - 35 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 13:- LEASES (cont.) The components of lease expense and supplemental cash flow information related to leases for the years ended December 31, 2019 and 2020 were as follows: Year ended December 31, 2019 2020 Components of lease expense Operating lease cost $ 5,624 $ 5,484 Short-term lease $ 75 $ 43 Total lease expenses $ 5,699 $ 5,527 Year ended December 31, 2019 2020 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities $ 5,718 $ 5,489 Supplemental non-cash information related to lease liabilities arising from obtaining ROU assets $ 8,346 $ 1,773 As of December 31, 2020, the Company has additional operating lease, that has not yet commenced, with lease obligations of approximately $18,700, for new offices. This operating lease will commence in 2021 with lease term of 10 years . For the year ended December 31, 2020, the weighted average remaining lease term is approximately three years, and the weighted average discount rate is 6.08 percent. The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease. Maturities of lease liabilities as of December 31, 2020 were as follows: 2021 3,286 2022 2,004 2023 1,341 2024 374 2025 and thereafter 840 Total operating lease payments 7,845 Less: imputed interest 822 Present value of lease liability 7,023 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 14:- SHAREHOLDERS' EQUITY The ordinary shares of the Company are traded on the Nasdaq Global Select Market, under the symbol "CRNT". a. General: The ordinary shares entitle their holders to receive notice to participate and vote in general meetings of the Company, the right to share in distributions upon liquidation of the Company, and to receive dividends, if declared. b. Stock options plans: 1. In 2003, the Company adopted a share option plan (the "Plan"). Under the Plan, options and Restricted Share six Upon adoption of the Plan, the Company reserved for issuance 8,639,000 ordinary shares in accordance with the respective terms thereof. From the adoption of the plan until December 31, 2020 the board of the company approved to reserve an additional amount of 16,256,688 ordinary shares. Any options or RSU's, which are canceled or forfeited before the expiration date, become available for future grants. As of December 31, 2020, the Company has 1,133,883 Ordinary shares available for future grant under the Plan. 2. On September 6, 2010, the Company's board of directors amended the Plan so as to enable to grant RSUs 3. The following table summarizes the activities for the Company’s stock options for the year ended December 31, Year ended December 31, 2020 Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at beginning of year 7,075,600 $ 3.64 3.30 $ 1,366 Granted 1,241,930 2.32 Exercised (851,958 ) 1.44 Forfeited or expired (1,226,843 ) 4.36 Outstanding at end of the year 6,238,729 $ 3.52 3.17 $ 2,654 Options exercisable at end of the year 4,017,763 $ 4.05 2.19 $ 1,938 Vested and expected to vest 5,806,504 $ 3.59 3.02 $ 2,502 F - 37 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- SHAREHOLDERS' EQUITY (Cont.) The weighted average fair value of options granted during 2018, 2019 and 2020 was $1.79, $1.39 and $1.06, respectively. The intrinsic value of options exercised during the years ended December 31, 2018, 2019 and 2020 was $4,617, $626 and $770, respectively. The following table summarizes the activities for the Company’s RSUs for the year ended December 31, 2020: Year ended December 31, 2020 Number of RSUs Aggregate intrinsic value Unvested at beginning of year 373,623 $ 785 Granted 160,100 Vested (188,603 ) Forfeited (35,134 ) Unvested at end of the year 309,986 862 Vested and expected to vest 231,013 $ 642 The weighted average fair value at grant date of RSUs granted during 2018, 2019 and 2020 was $3.23 $2.79 and $2.11, respectively. As of December 31, 2020, the total unrecognized estimated compensation cost related to non-vested stock options and RSU`s granted prior to that date was $ 1,730, which is expected to be recognized over a weighted average period of approximately one year. The following is a summary of the Company's stock options and RSUs granted separated into ranges of exercise price: Exercise price (range) Options and RSUs outstanding as of December 31, 2020 Weighted average remaining contractual life (years) for outstanding options Weighted average exercise price Options and RSUs exercisable as of December 31, 2020 Weighted average remaining contractual life (years) for exercisable options Weighted average exercise price $ $ $ RSUs 0.0 309,986 - 0.00 - - 0.00 0.01-2.00 883,864 0.87 1.24 853,245 0.74 1.22 2.01-4.00 4,291,793 4.11 2.62 2,155,157 3.26 2.70 4.01-6.00 302,654 2.69 4.59 248,943 2.37 4.67 6.01-8.00 15,000 1.75 6.21 15,000 1.75 6.21 8.01-10.00 365,668 1.31 8.92 365,668 1.31 8.92 10.01-13.04 379,750 0.14 12.80 379,750 0.14 12.80 6,548,715 4,017,763 F - 38 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 14:- SHAREHOLDERS' EQUITY (Cont.) The total equity-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2018, 2019 and 2020, was comprised as follows: Year ended December 31, 2018 2019 2020 Cost of revenues $ 42 $ 71 $ 110 Research and development 313 366 243 Selling and marketing 640 708 545 General and administrative 985 908 764 Total share-based compensation expenses $ 1,980 $ 2,053 $ 1,662 c. Dividends: In the event that cash dividends are declared in the future, such dividends will be paid in NIS or in foreign currency subject to any statutory limitations. The Company does not intend to pay cash dividends in the foreseeable future. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 15:- TAXES ON INCOME a. Israeli taxation: 1. Measurement of taxable income: The Company has elected to file its tax return under the Israeli Income Tax Regulations 1986 (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income). Accordingly, starting tax year 2003, results of operations in Israel are measured in terms of earnings in U.S. dollars. 2. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the "Law"): According to the Law, the Company is entitled to various tax benefits by virtue of the "Approved Enterprise" status granted to part of their enterprises, as implied by this Law. The principal benefits by virtue of the Law are: F - 39 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) According to the provisions of the Law, the Company has chosen to enjoy the "Alternative" track. Under this track, the Company is tax exempt in the first two years of the benefit period and subject to tax at the reduced rate of 10%-25% for the remaining benefit period. The benefit period under Approved Enterprise starts with the first year the benefited enterprise earns taxable income, provided that 14 years have not passed since the approval was granted and 12 years have not passed since the enterprise began operating. Generally, a company that is Abundant in Foreign Investment is entitled to an extension of the benefits period by an additional five years. The tax benefits under the Approved Enterprise are conditional upon the fulfillment of the conditions stipulated by the Law, regulations published and the letters of approval for the investments in the approved enterprises. Non-compliance with the conditions may cancel all or part of the benefits and refund of the amount of the benefits, including interest. The Company has three capital investment programs that have been granted Approved Enterprise status, under the Law. As of December 31, 2020, the 14 years have passed for the three Approved Enterprise programs. Income from sources other than the "Approved Enterprise" during the benefit period will be subject to the tax at the regular tax rate. The Company believes it will continue to enjoy its current tax benefits in accordance with the provisions of the Investment Law prior to the 2005 Amendment. F - 40 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) In December 2016, the Knesset passed an additional amendment to the Law which provides for additional benefits to Preferred Technological Enterprises by reducing the tax rate on preferred Technological Enterprise income (as such is defined in Amendment 73) to 12% (the "Amendment"). This Amendment came into effect in May 2017 when the Minister of Finance promulgated the regulations for its implementation. The Company has evaluated the effect of the adoption of the Amendment on its financial statements, and as of the date of the approval of the financial statements, the Company did not apply the Amendment. The Company may change its position in the future. 3. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: The Encouragement Law provides several tax benefits for industrial companies. An industrial company is defined as a company resident and located in Israel, at least 90% of the income of which in a given tax year exclusive of income from specified Government loans, capital gains, interest and dividends, is derived from an industrial enterprise owned by it. An industrial enterprise is defined as an enterprise whose major activity in a given tax year is industrial production activity. Management believes that the Company is currently qualified as an "industrial company" under the Encouragement Law and, as such, enjoys tax benefits, including: (1) deduction of purchase of know-how and patents and/or right to use a patent over an eight-year period; (2) the right to elect, under specified conditions, to file a consolidated tax return with additional related Israeli industrial companies and an industrial holding company; (3) accelerated depreciation rates on equipment and buildings; and (4) expenses related to a public offering on the Tel-Aviv Stock Exchange and on recognized stock markets outside of Israel, are deductible in equal amounts over three years. Eligibility for benefits under the Encouragement Law is not subject to receipt of prior approval from any Governmental authority. No assurance can be given that the Israeli tax authorities will agree that the Company qualifies, or, if the Company qualifies, that the Company will continue to qualify as an industrial company or that the benefits described above will be available to the Company in the future. 4. Tax rates: Taxable income of Israeli companies was subject to tax at the rate - 23% in the years 2018, 2019 and 2020. The effective tax rate payable by a company which is taxed under the Investment Law may be considerably lower (see also note 15.a2 above). Israeli corporations are generally taxed at the corporate income tax rate on their capital gains. The Company's tax assessments through 2015 tax year are considered final. F - 41 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) b. Tax Reform in U.S: On December 22, 2017, new federal tax legislation was enacted in the United States (referred to as the Tax Cuts and Jobs Act). The Tax Cuts and Jobs Act reduced the federal corporate income tax rate to 21% from 35% effective January 1, 2018. The Company's federal income tax expense for tax years beginning January 1, 2018 is be based on the newly enacted 21% rate. c. Income taxes for non-Israeli subsidiaries: Non-Israeli subsidiaries are taxed according to the tax laws in their respective counties of residence. d. The income tax expense (benefit) for the years ended December 31, 2018, 2019 and 2020 consisted of the Year ended December 31, 2018 2019 2020 Current $ 3,350 $ 2,734 $ 2,641 Deferred (6,601 ) (258 ) (23 ) $ (3,251 ) $ 2,476 $ 2,618 Domestic (Israel) $ (5,919 ) $ 781 $ 839 Foreign 2,668 1,695 1,779 $ (3,251 ) $ 2,476 $ 2,618 F - 42 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) e. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2019 2020 Deferred tax assets: Net operating loss carry forward $ 71,653 $ 75,926 Temporary differences mainly relating to Research and Development, reserves and allowances 25,773 28,429 Deferred tax asset before valuation allowance 97,426 104,355 Valuation allowance (89,320 ) (96,076 ) Deferred tax asset, net $ 8,106 $ 8,279 In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized in each tax jurisdiction. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded valuation allowance amounting $89,320 and $96,076 as of December 31, 2019 and 2020 respectively. f. Net operating loss carry forward and capital loss: As of December 31, 2020, the Company has accumulated net operating losses and capital loss for Israeli income tax purposes in the amount of approximately $ 188,435 and $ 8,298, respectively. The net operating losses and capital loss may be carried forward and offset against taxable income in the future for an indefinite period. As of December 31, 2020, the Company's Norwegian subsidiary had a net operating loss carry forward of approximately $ 20,116 that can be carried forward. The net operating losses may be carried forward and offset against taxable income in the future for an indefinite period. As of December 31, 2020 the Company's Brazilian subsidiary had a net operating loss carryforward of approximately $ 34,040 that can be carried forward. The net operating losses may be carried forward and offset against taxable income in the future for an indefinite period. The offset is limited to a maximum 30% of the annual taxable income. F - 43 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) g. Income (Loss) before taxes is comprised as follows: Year ended December 31, 2018 2019 2020 Domestic $ 17,921 $ (2,171 ) $ (24,192 ) Foreign 1,874 2,952 10,697 $ 19,795 $ 781 $ (13,495 ) h. Reconciliation of the theoretical tax expense to the actual tax expense: Reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: Year ended December 31, 2018 2019 2020 Income (loss) before taxes as reported in the consolidated statements of operations $ 19,795 $ 781 $ (13,495 ) Statutory tax rate 23 % 23 % 23 % Theoretical tax expenses (income) on the above amount at the Israeli statutory tax rate $ 4,553 $ 180 $ (3,104 ) Non-deductible expenses 1,299 519 (111 ) Non-deductible expenses related to employee stock options 376 472 383 Changes in tax rate 179 (5 ) - Losses and other temporary differences in respect of which no deferred taxes were generated (including changes in valuation allowance) (4,068 ) 977 5,318 Recognition of deferred taxes during the year, for which valuation allowance was provided in prior years (7,200 ) - - Other 1,610 333 132 Actual tax expense (benefit) $ (3,251 ) $ 2,476 $ 2,618 F - 44 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 15:- TAXES ON INCOME (Cont.) i. A reconciliation of the beginning and ending balances of unrecognized tax benefits related to uncertain tax positions December 31, 2019 2020 Beginning balance $ 2,373 $ 2,492 Decreases in tax positions for prior years (406 ) (708 ) Increases related to tax positions taken during prior years 40 184 Increase related to tax positions taken during the current year 485 453 Ending balance $ 2,492 $ 2,421 The Company has further accrued $ 134 due to interest and penalty related to uncertain tax positions as of December 31, 2020. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2020 | |
Revenues [Abstract] | |
REVENUES | NOTE 16:- REVENUES The Company recognizes contract liabilities, or deferred revenues, when it receives advance payments from customers before performance obligations have been performed. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of reporting period. The following table presents the significant changes in the deferred revenue balance during the year ended December 31, 2020: Year ended December 31, 2019 Year ended December 31, 2020 Balance, beginning of the period $ 3,873 $ 7,999 New performance obligations 11,195 5,210 Reclassification to revenue as a result of satisfying performance obligations (7,069 ) (2,222 ) Balance, end of the period 7,999 10,987 Less: long-term portion of deferred revenue 6,265 7,495 Current portion, end of period $ 1,734 $ 3,492 F - 45 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 16:- REVENUES (Cont.) Remaining performance obligations represent contracted revenues that have not yet been recognized, which includes deferred revenues and non-cancelable contracts that will be recognized as revenue in future periods. The following table represents the remaining performance obligations as of December 31, 2020, which are expected to be satisfied and recognized in future periods: 2021 2022 2023 and thereafter Unsatisfied performance obligations $ 4,320 $ 216 $ 8,129 The Company elected to apply the optional exemption under ASC 606 paragraph 10-50-14(a) not to disclose the remaining performance obligations that relate to contracts with an original expected duration of one year or less for which deferred revenues have not been recorded yet. |
SEGMENTS, CUSTOMERS AND GEOGRAP
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION | NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION a. The Company applies ASC topic 280, "Segment Reporting", ("ASC 820"). The Company operates in b. The following tables present total revenues for the years ended December 31, 2018, 2019 and 2020 and long-lived Year ended December 31, 2018 2019 2020 Revenues: North America $ 41,384 $ 42,474 $ 38,165 Europe 38,919 42,439 44,832 Africa 23,690 25,614 23,497 Asia-Pacific and Middle East 47,320 53,948 47,677 India 131,201 49,748 62,047 Latin America 61,360 71,360 46,663 $ 343,874 $ 285,583 $ 262,881 Property and equipment, net: December 31, 2019 2020 Israel $ 29,165 $ 26,423 Others 5,700 5,325 $ 34,865 $ 31,748 F - 46 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.) c. Major customer data as a percentage of total revenues: In 2020, the company had revenues from a single customer that represent group of affiliated companies equaling 22.1% of total revenues. In 2019 the Company had revenues from two customers that represents two groups of affiliated companies equaling 14.0% and 11.8% of total revenues. In 2018, the Company had revenues from a single customer that accounted for approximately 21.1% and from a customer that represents group of affiliated companies equaling 19.6% of total revenues. |
SELECTED STATEMENTS OF OPERATIO
SELECTED STATEMENTS OF OPERATIONS DATA | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data [Abstract] | |
SELECTED STATEMENTS OF OPERATIONS DATA | NOTE 18:- SELECTED STATEMENTS OF OPERATIONS DATA a. Financial expenses and others, net: Year ended December 31, 2018 2019 2020 Financial income: Interest on deposits $ 111 $ 111 $ 79 Foreign currency translation differences and derivatives (*) 3,981 190 1,330 Others - - 807 4,092 301 2,216 Financial expenses: Bank charges and interest on loans (4,597 ) (3,787 ) (4,130 ) Foreign currency translation differences and derivatives (5,844 ) (2,627 ) (3,716 ) Others - (408 ) (293 ) (10,441 ) (6,822 ) (8,139 ) $ (6,349 ) $ (6,521 ) $ (5,923 ) (*) During 2018 the Company recorded $ F - 47 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 18:- SELECTED STATEMENTS OF OPERATIONS DATA (Cont.) b. Net income (loss) per share: The following table sets forth the computation of basic and diluted net earnings per share: Year ended December 31, 2018 2019 2020 Numerator: Numerator for basic and diluted net income (loss) per share - income (loss) available to shareholders of Ordinary shares $ 23,046 $ (2,344 ) $ (17,092 ) Denominator: Denominator for basic net income (loss) per share - weighted average number of Ordinary shares 78,579,013 80,296,581 81,149,687 Effect of dilutive securities: Employee stock options and RSU 2,442,514 - - Denominator for diluted net income (loss) per share - adjusted weighted average number of shares $ 81,021,527 $ 80,296,581 $ 81,149,687 |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 19:- RELATED PARTY BALANCES AND TRANSACTIONS a. Related party balances and transactions are with related companies and principal shareholder. Yehuda Zisapel is a Members of the RAD-BYNET group provide the Company on an as-needed basis with information systems infrastructure, administrative services, medical insurance, as well as in connection with logistics services, the Company reimburses each company for its costs in providing these services. The aggregate amount of these expenses was approximately $ 1,856, $ 2,242 and $ 1,801 in 2018, 2019 and 2020, respectively. The Company leases its offices in Israel from real estate holding companies controlled by Yehuda and Zohar Zisapel. The leases of this facility will expire end of March 2021. The aggregate amount of rent and maintenance expenses related to these properties were approximately $ 1,960, $ 1,936 and $ 2,099 in 2018, 2019 and 2020, respectively. F - 48 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 19:- RELATED PARTY BALANCES AND TRANSACTIONS (Cont.) The Company has an OEM arrangement with RADWIN, a member of RAD-BYNET group, according to which the Company purchases RADWIN products that are then resold to the Company's customers. In addition, the Company purchases certain inventory components from other members of the RAD-BYNET group, which are integrated into its products. The aggregate purchase price of these components was approximately $ 78, $ 152 and $ 83 for the years ended December 31, 2018, 2019 and 2020, respectively. The Company purchases certain property and equipment from members of the RAD-BYNET group, the aggregate purchase price of these assets was approximately $ 148, $ 46 and $ 274 for the years ended December 31, 2018, 2019 and 2020, respectively. b. As part of the operating agreements with Orocom for the Pronatel project in Peru, the Company had two seats in In December 2018, the Company purchased 14% of the share capital of Compass for a consideration of $ 833. In December 2019, the holding was decreased to 11% as a result of third- party equity investment. As of December 31, 2020, the investment was fully written off as a result of equity losses. Transactions with related parties: Year ended December 31, 2018 2019 2020 Revenues $ 3,336 $ 6,745 $ 5,843 Cost of revenues $ 1,111 $ 1,659 $ 4,715 Research and development expenses $ 1,008 $ 1,248 $ 1,245 Selling and marketing expenses $ 771 $ 763 $ 731 General and administrative expenses $ 1,067 $ 1,002 $ 913 Purchase of property and equipment $ 148 $ 46 $ 274 Balances with related parties: December 31, 2019 2020 Trade payables, other accounts payable and accrued expenses $ 1,148 $ 925 Trade Receivables $ 7,378 $ 13,117 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | a. Basis of presentation: The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). |
Use of estimates | b. Use of estimates: The preparation of financial statements, in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgment, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The duration, scope and effects of the ongoing COVID-19 pandemic, government and other third party responses to it, and the related macroeconomic effects, including to the Company’s business and the business of the Company’s suppliers and customers are uncertain, rapidly changing and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to this evolving situation. Such changes could result in future impairments of intangibles, fair values of stock-based awards, inventory write-off, warranty provision, income taxes, contingent liabilities, and incremental credit losses on receivables, or an increase in the Company’s insurance liabilities as of the time of a relevant measurement event. |
Financial statements in U.S. dollars | c. Financial statements in U.S. dollars: A majority of the revenues of the Company and certain of its subsidiaries are generated in U.S. dollars ("dollars"). In addition, a substantial portion of the Company's and certain of its subsidiaries' costs is incurred in dollars. Since management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate and considers the non-U.S. subsidiaries to be a direct, integral extension of the parent company's operations, the dollar is its functional and reporting currency. Accordingly, amounts in currencies other than U.S dollars have been re-measured in accordance with ASC topic 830, "Foreign Currency Matters" ("ASC 830") as follows: Monetary balances - at the exchange rate in effect on the balance sheet date. Consolidated statements of operations items - average exchange rates prevailing during the year. All exchange gains and losses from the re-measurement mentioned above are reflected in the statement of operations in financial expenses and others, net. F - 14 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The financial statements of the Company's Brazilian subsidiary, whose functional currency is not the dollar, have been re-measured and translated into dollars. All amounts on the balance sheets have been translated into the dollar using the exchange rates in effect on the relevant balance sheet dates. All amounts in the statements of operations have been translated into the dollar using the average exchange rate for the relevant periods. The resulting translation adjustments are reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. |
Principles of consolidation | d. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries ("the Group"). Intercompany balances and transactions including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. |
Cash Equivalents | e. Cash equivalents: Cash equivalents include short-term unrestricted, highly liquid investments that are readily convertible to cash and with original maturities of three months or less, at acquisition. |
Long-term bank deposits | f. Long-term bank deposits: Long-term bank deposits are deposits with an original maturity of more than twelve months from the date of investment and which do not meet the definition of cash equivalents. |
Inventories | g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued products, and for market prices lower than cost, if any. The Company periodically evaluates the quantities on hand relative to historical and projected sales volume (which is determined based on an assumption of future demand and market conditions) and the age of the inventory. At the point of the loss recognition, a new lower cost basis for that inventory is established. In addition, if required, the Company records a liability for firm non-cancelable and unconditional purchase commitments with contract manufacturers for quantities in excess of the Company's future demands forecast consistent with its valuation of excess and obsolete inventory. Inventory includes costs of products delivered to customers and not recognized as cost of sales, where revenues in the related arrangements were not recognized. Cost is determined for all types of inventory using the moving average cost method plus indirect costs. |
Property and equipment | h. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers, manufacturing and peripheral equipment 6 – 33 Office, furniture and equipment Mainly 15 Leasehold improvements Over the shorter of the term of the lease or useful life of the asset |
Impairment of long-lived assets | i. Impairment of long-lived assets: The Company's long-lived assets are reviewed for impairment in accordance with ASC topic 360," Property Plant and Equipment", ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. During 2018, 2019 and 2020, no impairment losses have been recognized. |
Income taxes | j. Income taxes: The Company account for income taxes in accordance with ASC topic 740, "Income Taxes", ("ASC 740"). This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and for carry forward losses deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized. For more information see note 15e. The Company accounts for uncertain tax positions in accordance with ASC No. 740, "Income Taxes", ("ASC 740"). ASC 740 contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company elected to classify interest expenses and penalties recognized in the financial statements as income taxes. For more information see note 15i. |
Intangible assets, net | k. Intangible assets, net: Intangible assets consist of technology and incurred software development costs capitalized in accordance with ASC 985-20, "Software - Costs of Software to be Sold, Leased, or Marketed". Intangible assets that are considered to have definite useful life are amortized using the straight-line basis over their estimated useful lives. |
Revenue recognition | l. Revenue recognition: The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer tangible products, network roll-out, professional services and customer support, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to rebates and adjustments to determine the net consideration to which the Company expects to receive. As the Company’s standard payment terms are less than one year, the contracts have no significant financing component. The Company allocates the transaction price to each distinct performance obligation based on their relative standalone selling price. Revenue from tangible products is recognized at a point in time when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied). The revenues from customer support and extended warranty is recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. Revenues from network roll-out and professional services are recognized when the Company's performance obligation is satisfied, usually upon customer acceptance. The Company accounts for rebates and stock rotations provided to customers as variable consideration, based on historical analysis of credit memo data, rebate plans and stock rotation arrangements, as a deduction from revenue in the period in which the revenue is recognized. |
Research and development expenses, net | m. Research and development expenses, net: Research and development expenses, net of government grants, are charged to the statement of operations as incurred, except for development expenses which were capitalized in accordance with ASC 985-20 "Software – Costs of Software to be Sold, Leased, or Marketed" (see k above). |
Warranty costs | n. Warranty costs: The Company generally offers a standard limited warranty, including parts and labor for an average period of 1-3 years for its products. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include the number of installed units, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. The Company recorded income (expenses) from decrease (increase) of warranty provision for the years ended December 31, 2018, 2019 and 2020 in the amount of $ (83), $ 654 and $ 178, respectively. As of December 31, 2019 and 2020, the warranty provision was $ 1,452 and $ 1,274, respectively. |
Derivative instruments | o. Derivative instruments: The Company has instituted a foreign currency cash flow hedging program using foreign currency forward and option contracts ("derivative instruments") in order to hedge the exposure to variability in expected future cash flows resulting from changes in related foreign currency exchange rates. These transactions are designated as cash flow hedges, as defined under ASC topic 815, "Derivatives and Hedging". ASC 815 requires companies to recognize all of their derivative instruments as either assets or liabilities in the financial statements at fair value. The Company measured the fair value of the contracts in accordance with ASC topic 820, "Fair value Measurement and Disclosures" at Level 2 (see also note 2t). The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. F - 18 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments that don’t meet the definition of a hedge, the changes in the fair value are included immediately in earnings in “Financial expenses and others, net”, in each reporting period. The Company's cash flow hedging program is to hedge against the risk of overall changes in cash flows resulting from forecasted foreign currency of salary and rent payments during the year. The Company hedges portions of its forecasted expenses denominated in NIS with forward exchange contracts. |
Concentrations of credit risk | p. Concentrations of credit risk: Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. The majority of the Company's cash and cash equivalents are maintained in U.S. dollar. Generally, these cash and cash equivalents and deposits may be redeemed upon demand. Management believes that the financial institutions that hold the Company's and its subsidiaries' cash and cash equivalents are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these assets. The Company's trade receivables are geographically diversified and derived from sales to customers all over the world. The Company and its subsidiaries generally do not require collateral; however, in certain circumstances, the Company and its subsidiaries may require letters of credit, additional guarantees or advance payments. The Company and its subsidiaries perform ongoing credit evaluations of their customers and insure certain trade receivables under credit insurance policies. |
Transfers of financial assets | q. Transfers of financial assets: ASC 860 "Transfers and Servicing", ("ASC 860"), establishes a standard for determining when a transfer of financial assets should be accounted for as a sale. The Company's arrangements are such that the underlying conditions are met for the transfer of financial assets to qualify for accounting as a sale. The transfers of financial assets are typically performed by the factoring of receivables to two financial institutions. F - 19 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) As of December 31, 2019, and 2020, the Company sold trade receivables to several different financial institutions in a total net amount of $ 10,422 and $ 21,993, respectively. Control and risk of those trade receivables were fully transferred in accordance with ASC 860. During the years ended on December 31, 2018, 2019 and 2020, the Company recorded amounts of $ 585, $ 506 and $ 575, respectively, as financial expense related to its factoring arrangements. |
Severance pay | r. Severance pay: The Company's severance pay liability for its Israeli employees is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for all of its employees in Israel is covered by monthly deposits with pension funds, insurance policies and an accrual. The value of the funds deposited into pension funds and insurance policies is recorded as an asset - severance pay fund - in the Company's balance sheet. The severance pay fund includes the deposited funds and accumulated adjustments to the Israeli Consumer Price Index up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds in insurance policies, is based on the cash surrendered value of these policies and includes profits / losses. Starting April 2009, the Company's agreements with new employees in Israel are under section 14 of the Severance Pay Law -1963. The Company's contributions for severance pay shall replace its severance obligation, no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to employees once the deposit amounts have been paid. As of December 2019 and 2020, accrued severance pay amounted to $ 8,539 and $ 9,282 respectively. Severance expense for the years ended December 31, 2018, 2019 and 2020, amounted to approximately $ 2,107, $ 2,336 and $ 2,538, respectively. The Company accounts for its obligations for pension and other postretirement benefits in accordance with ASC 715, "Compensation - Retirement Benefits". For more information refer to note 11. |
Accounting for stock-based compensation | s. Accounting for stock-based compensation: ASC topic 718, "Compensation - Stock Compensation", ("ASC 718"), requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations. The Company estimates the fair value of stock options granted under ASC 718 using the binomial model with the following assumptions for 2018, 2019 and 2020: December 31, 2018 2019 2020 Dividend yield 0% 0% 0% Volatility 53%-62% 53%-65% 60%-85% Risk free interest 1.8%-2.9% 1.2%-2.7% 0.1%-1.0% Early exercise multiple 2.0-2.3 1.3-2.3 1.5-1.6 Risk-free interest rates are based on the yield from U.S. Treasury zero-coupon bonds with a term equivalent to the contractual life of the options; volatility of price of the Company's shares based upon actual historical stock price movements. The Early exercise factor is representing the value of the underlying stock as a multiple of the exercise price of the option which, if achieved, results in exercise of the option. Early exercise multiple is based on actual historical exercise activity. The expected term of the options granted is derived from output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The Company recognizes compensation expense using the accelerated method for all awards ultimately expected to vest. Estimated forfeitures are based on historical pre-vesting forfeitures and on management's estimates. ASC topic 718 requires forfeitures to be estimated and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Fair value of financial instruments | t. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures". Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. F - 21 CERAGON NETWORKS LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share data) NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The following methods and assumptions were used by the Company and its subsidiaries in estimating their fair value disclosures for financial instruments: The carrying amounts of cash and cash equivalents, trade receivables, other accounts receivable, trade payables, and other accounts payable and accrued expenses approximate their fair values due to the short-term maturities of such instruments. The derivative instruments are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. |
Comprehensive income | u. Comprehensive income: The Company accounts for comprehensive income in accordance with ASC topic 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in stockholders' equity during the period except those resulting from investments by, or distributions to, stockholders. The components of accumulated other comprehensive income - (“AOCI”) were as follows: Unrealized Gains (Losses) on Cash Flow Hedges Foreign Currency Translation Adjustments Total Balance as of January 1, 2020 $ 318 $ (8,984 ) $ (8,666 ) Other comprehensive income before reclassifications 1,752 (929 ) 823 Amounts reclassified from AOCI (225 ) - (225 ) Other comprehensive income 1,527 (929 ) 598 Balance as of December 31, 2020 $ 1,845 $ (9,913 ) $ (8,068 ) The effects on net income of amounts reclassified from AOCI for the year ended December 31, 2020 derive from realized gains on cash flow hedges, included in operating expenses. |
Treasury shares | v. Treasury shares: The Company repurchased its ordinary shares on the open-market and holds such shares as Treasury shares. The Company presents the cost of repurchased treasury shares as a reduction of shareholders' equity. |
Basic and diluted net earnings per share | w. Basic and diluted net earnings per share: Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC topic 260, "Earnings Per Share" ("ASC 260"). The total weighted average number of shares related to the outstanding options and RSU's excluded from the calculations of diluted net earnings per share due to their anti-dilutive effect was 2,426,689, 3,473,312 and 4,204,381 for the years ended December 31, 2018, 2019 and 2020, respectively. |
Equity method investment | x. Equity method investment Investments in companies that are not controlled but over which the Company can exercise significant influence are presented using the equity method of accounting. |
Impact of recently issued Accounting Standards | y. Impact of recently issued Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The new accounting standard became effective for the Company beginning January 1, 2020. The adoption of the standard had an impact on the Company’s consolidated financial statements and related disclosures. Please refer to note 10. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company adopted the provisions of this update as of January 1, 2020 with no material impact on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Annual Depreciation Rates | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Computers, manufacturing and peripheral equipment 6 – 33 Office, furniture and equipment Mainly 15 Leasehold improvements Over the shorter of the term of the lease or useful life of the asset |
Schedule of Stock Option Granted Assumptions | The Company estimates the fair value of stock options granted under ASC 718 using the binomial model with the following assumptions for 2018, 2019 and 2020: December 31, 2018 2019 2020 Dividend yield 0% 0% 0% Volatility 53%-62% 53%-65% 60%-85% Risk free interest 1.8%-2.9% 1.2%-2.7% 0.1%-1.0% Early exercise multiple 2.0-2.3 1.3-2.3 1.5-1.6 |
Schedule of Accumulated Other Comprehensive Income, Net | The components of accumulated other comprehensive income - (“AOCI”) were as follows: Unrealized Gains (Losses) on Cash Flow Hedges Foreign Currency Translation Adjustments Total Balance as of January 1, 2020 $ 318 $ (8,984 ) $ (8,666 ) Other comprehensive income before reclassifications 1,752 (929 ) 823 Amounts reclassified from AOCI (225 ) - (225 ) Other comprehensive income 1,527 (929 ) 598 Balance as of December 31, 2020 $ 1,845 $ (9,913 ) $ (8,068 ) |
OTHER ACCOUNTS RECEIVABLE AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of other accounts receivable and prepaid expenses | December 31, 2019 2020 Government authorities $ 5,168 $ 5,726 Deferred charges and prepaid expenses 3,639 5,743 Deposits receivable 532 504 Advances to suppliers 357 230 Hedging asset 372 1,937 Other 965 615 $ 11,033 $ 14,755 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | December 31, 2019 2020 Raw materials $ 18,211 $ 19,764 Work in progress 349 194 Finished products 43,572 30,669 $ 62,132 $ 50,627 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property And Equpment, Net | December 31, 2019 2020 Cost: Computers, manufacturing, peripheral equipment $ 120,796 $ 125,097 Office furniture and equipment 1,925 1,959 Leasehold improvements 1,716 1,564 124,437 128,620 Accumulated depreciation: Computers, manufacturing, peripheral equipment 86,892 94,294 Office furniture and equipment 1,577 1,500 Leasehold improvements 1,103 1,078 89,572 96,872 Depreciated cost $ 34,865 $ 31,748 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets | The following table sets forth the components of intangible assets: December 31, 2019 2020 Original amounts: Technology $ 5,155 $ 3,767 Software development costs 2,879 2,879 8,034 6,646 Accumulated amortization: Software development costs 136 529 Net amounts: Technology 5,155 3,767 Software development costs 2,743 2,350 Intangible assets, net $ 7,898 $ 6,117 |
OTHER ACCOUNTS PAYABLE AND AC_2
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule Of Other Accounts Payable And Accrued Expenses | December 31, 2019 2020 Employees and payroll accruals $ 12,321 $ 12,617 Provision for warranty costs 1,452 1,274 Government authorities 2,071 1,612 Accrued expenses 3,675 2,879 Advanced payments from customers 1,731 4,351 Hedging Liability 112 281 Other 1,393 1,034 $ 22,755 $ 24,048 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivative Contracts | The fair value of derivative contracts in the consolidated balance sheets at December 31, 2020 and December 31, 2019 were as follows: Other accounts receivable and prepaid expenses Other accounts payable and accrued expenses December 31, 2020 Derivatives designated as hedging instruments Currency forward contracts $ 1,847 $ 2 Derivatives not designated as hedging instruments Currency forward and option contracts $ 90 $ 279 Total derivatives $ 1,937 $ 281 Other accounts receivable and prepaid expenses Other accounts payable and accrued expenses December 31, 2019 Derivatives designated as hedging instruments Currency forward contracts $ 318 $ - Derivatives not designated as hedging instruments Currency forward and option contracts $ 55 $ 112 Total derivatives $ 373 $ 112 The notional amounts for derivatives contracts were as follows: December 31, 2019 December 31, 2020 Derivatives designated as hedging instruments Currency forward contracts $ 29,621 $ 35,089 Derivatives not designated as hedging instruments Currency forward and option contracts $ 28,532 $ 31,207 |
Schedule of Derivative Contracts on Consolidated Statements of Operations | The effect of derivative contracts on the consolidated statements of operations for the year ended December 31, 2019 and 2020 was as follows: Year ended December 31, 2019 2020 Operating income (expenses) $ 895 $ 225 Financial income (expenses) $ (207 ) $ (894 ) |
Schedule of Assets And Liabilities Measured At Fair Value On Recurring Basis | The following table sets forth the Company’s net assets that were measured at fair value as of December 31, 2019 and December 31, 2020, by level within the fair value hierarchy: Fair value measurements using input type Fair value hierarchy December 31, 2019 December 31, 2020 Derivatives instruments Level 2 $ 260 $ 1,655 Total net assets $ 260 $ 1,655 |
CREDIT LOSSES (Tables)
CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Allowance for Credit Losses | The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of trade receivables to present the net amount expected to be collected: Year ended December 31, 2020 Balance, at beginning of period $ 4,236 Cumulative effect of adoption of ASU Topic 326 700 Provision for expected credit losses 1,636 Amounts written off charged against the allowance and others (374 ) Balance, at end of period $ 6,198 |
PENSION LIABILITIES, NET (Table
PENSION LIABILITIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Liability, Defined Benefit Plan [Abstract] | |
Schedule of Changes In Projected Benefit Obligations | The following tables provide a reconciliation of the changes in the plans' benefits obligation for the year ended December 31, 2019, and the statement of funds status as of December 31, 2020: December 31, 2019 2020 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 2,177 $ 2,368 Service cost 12 - Interest cost 47 53 Expenses paid (203 ) (201 ) Exchange rates differences (26 ) 49 Actuarial loss 361 241 Projected benefit obligation at end of year $ 2,368 $ 2,510 |
Schedule of Assumptions Used | The assumptions used in the measurement of the Company' benefits obligations as of December 31, 2019 and 2020 are as follows: December 31, 2019 2020 Weighted-average assumptions Discount rate 2.30 % 1.70 % Rate of compensation increase 2.25 % 2.25 % |
Schedule of Net Benefit Costs | The following table provides the components of net periodic benefits cost for the years ended December 31, 2018, 2019 and 2020: December 31, 2018 2019 2020 Components of net periodic benefit cost Service cost $ 16 $ 12 $ - Interest cost 47 47 53 Net periodic benefit cost $ 63 $ 59 $ 53 |
Schedule of Expected Benefit Payments | Benefit payments are expected to be paid as follows: December 31, 2020 2021 $ 191 2022 164 2023 156 2024 149 2025 and thereafter 1,850 $ 2,510 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense and supplemental cash flow information related to leases for the years ended December 31, 2019 and 2020 were as follows: Year ended December 31, 2019 2020 Components of lease expense Operating lease cost $ 5,624 $ 5,484 Short-term lease $ 75 $ 43 Total lease expenses $ 5,699 $ 5,527 Year ended December 31, 2019 2020 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities $ 5,718 $ 5,489 Supplemental non-cash information related to lease liabilities arising from obtaining ROU assets $ 8,346 $ 1,773 |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2020 were as follows: 2021 3,286 2022 2,004 2023 1,341 2024 374 2025 and thereafter 840 Total operating lease payments 7,845 Less: imputed interest 822 Present value of lease liability 7,023 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Summary of Stock Options Granted | 3. The following table summarizes the activities for the Company’s stock options for the year ended December 31, Year ended December 31, 2020 Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at beginning of year 7,075,600 $ 3.64 3.30 $ 1,366 Granted 1,241,930 2.32 Exercised (851,958 ) 1.44 Forfeited or expired (1,226,843 ) 4.36 Outstanding at end of the year 6,238,729 $ 3.52 3.17 $ 2,654 Options exercisable at end of the year 4,017,763 $ 4.05 2.19 $ 1,938 Vested and expected to vest 5,806,504 $ 3.59 3.02 $ 2,502 |
Schedule of RSUs Granted | The following table summarizes the activities for the Company’s RSUs for the year ended December 31, 2020: Year ended December 31, 2020 Number of RSUs Aggregate intrinsic value Unvested at beginning of year 373,623 $ 785 Granted 160,100 Vested (188,603 ) Forfeited (35,134 ) Unvested at end of the year 309,986 862 Vested and expected to vest 231,013 $ 642 |
Summary of Stock Options And RSUs Granted Separated Into Ranges of Exercise Price | The following is a summary of the Company's stock options and RSUs granted separated into ranges of exercise price: Exercise price (range) Options and RSUs outstanding as of December 31, 2020 Weighted average remaining contractual life (years) for outstanding options Weighted average exercise price Options and RSUs exercisable as of December 31, 2020 Weighted average remaining contractual life (years) for exercisable options Weighted average exercise price $ $ $ RSUs 0.0 309,986 - 0.00 - - 0.00 0.01-2.00 883,864 0.87 1.24 853,245 0.74 1.22 2.01-4.00 4,291,793 4.11 2.62 2,155,157 3.26 2.70 4.01-6.00 302,654 2.69 4.59 248,943 2.37 4.67 6.01-8.00 15,000 1.75 6.21 15,000 1.75 6.21 8.01-10.00 365,668 1.31 8.92 365,668 1.31 8.92 10.01-13.04 379,750 0.14 12.80 379,750 0.14 12.80 6,548,715 4,017,763 |
Schedule of Equity-Based Compensation Expense | The total equity-based compensation expense related to all of the Company's equity-based awards, recognized for the years ended December 31, 2018, 2019 and 2020, was comprised as follows: Year ended December 31, 2018 2019 2020 Cost of revenues $ 42 $ 71 $ 110 Research and development 313 366 243 Selling and marketing 640 708 545 General and administrative 985 908 764 Total share-based compensation expenses $ 1,980 $ 2,053 $ 1,662 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | d. The income tax expense (benefit) for the years ended December 31, 2018, 2019 and 2020 consisted of the Year ended December 31, 2018 2019 2020 Current $ 3,350 $ 2,734 $ 2,641 Deferred (6,601 ) (258 ) (23 ) $ (3,251 ) $ 2,476 $ 2,618 Domestic (Israel) $ (5,919 ) $ 781 $ 839 Foreign 2,668 1,695 1,779 $ (3,251 ) $ 2,476 $ 2,618 |
Schedule of Deferred Income Taxes | Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2019 2020 Deferred tax assets: Net operating loss carry forward $ 71,653 $ 75,926 Temporary differences mainly relating to Research and Development, reserves and allowances 25,773 28,429 Deferred tax asset before valuation allowance 97,426 104,355 Valuation allowance (89,320 ) (96,076 ) Deferred tax asset, net $ 8,106 $ 8,279 |
Schedule of Income (Loss) Before Taxes | g. Income (Loss) before taxes is comprised as follows: Year ended December 31, 2018 2019 2020 Domestic $ 17,921 $ (2,171 ) $ (24,192 ) Foreign 1,874 2,952 10,697 $ 19,795 $ 781 $ (13,495 ) |
Schedule of Income Tax Reconciliation | Reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: Year ended December 31, 2018 2019 2020 Income (loss) before taxes as reported in the consolidated statements of operations $ 19,795 $ 781 $ (13,495 ) Statutory tax rate 23 % 23 % 23 % Theoretical tax expenses (income) on the above amount at the Israeli statutory tax rate $ 4,553 $ 180 $ (3,104 ) Non-deductible expenses 1,299 519 (111 ) Non-deductible expenses related to employee stock options 376 472 383 Changes in tax rate 179 (5 ) - Losses and other temporary differences in respect of which no deferred taxes were generated (including changes in valuation allowance) (4,068 ) 977 5,318 Recognition of deferred taxes during the year, for which valuation allowance was provided in prior years (7,200 ) - - Other 1,610 333 132 Actual tax expense (benefit) $ (3,251 ) $ 2,476 $ 2,618 |
Schedule of Changes In Unrecognized Tax Benefits | i. A reconciliation of the beginning and ending balances of unrecognized tax benefits related to uncertain tax positions December 31, 2019 2020 Beginning balance $ 2,373 $ 2,492 Decreases in tax positions for prior years (406 ) (708 ) Increases related to tax positions taken during prior years 40 184 Increase related to tax positions taken during the current year 485 453 Ending balance $ 2,492 $ 2,421 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenues [Abstract] | |
Schedule of Revenues | The following table presents the significant changes in the deferred revenue balance during the year ended December 31, 2020: Year ended December 31, 2019 Year ended December 31, 2020 Balance, beginning of the period $ 3,873 $ 7,999 New performance obligations 11,195 5,210 Reclassification to revenue as a result of satisfying performance obligations (7,069 ) (2,222 ) Balance, end of the period 7,999 10,987 Less: long-term portion of deferred revenue 6,265 7,495 Current portion, end of period $ 1,734 $ 3,492 |
Schedule of Remaining Performance Obligations | Remaining performance obligations represent contracted revenues that have not yet been recognized, which includes deferred revenues and non-cancelable contracts that will be recognized as revenue in future periods. The following table represents the remaining performance obligations as of December 31, 2020, which are expected to be satisfied and recognized in future periods: 2021 2022 2023 and thereafter Unsatisfied performance obligations $ 4,320 $ 216 $ 8,129 |
SEGMENTS, CUSTOMERS AND GEOGR_2
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Schedule of Revenues by Region | b. The following tables present total revenues for the years ended December 31, 2018, 2019 and 2020 and long-lived Year ended December 31, 2018 2019 2020 Revenues: North America $ 41,384 $ 42,474 $ 38,165 Europe 38,919 42,439 44,832 Africa 23,690 25,614 23,497 Asia-Pacific and Middle East 47,320 53,948 47,677 India 131,201 49,748 62,047 Latin America 61,360 71,360 46,663 $ 343,874 $ 285,583 $ 262,881 Property and equipment, net: December 31, 2019 2020 Israel $ 29,165 $ 26,423 Others 5,700 5,325 $ 34,865 $ 31,748 |
SELECTED STATEMENTS OF OPERAT_2
SELECTED STATEMENTS OF OPERATIONS DATA (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data [Abstract] | |
Schedule of Financial Expenses and Others, Net | a. Financial expenses and others, net: Year ended December 31, 2018 2019 2020 Financial income: Interest on deposits $ 111 $ 111 $ 79 Foreign currency translation differences and derivatives (*) 3,981 190 1,330 Others - - 807 4,092 301 2,216 Financial expenses: Bank charges and interest on loans (4,597 ) (3,787 ) (4,130 ) Foreign currency translation differences and derivatives (5,844 ) (2,627 ) (3,716 ) Others - (408 ) (293 ) (10,441 ) (6,822 ) (8,139 ) $ (6,349 ) $ (6,521 ) $ (5,923 ) (*) During 2018 the Company recorded $ |
Schedule of Net income per share | The following table sets forth the computation of basic and diluted net earnings per share: Year ended December 31, 2018 2019 2020 Numerator: Numerator for basic and diluted net income (loss) per share - income (loss) available to shareholders of Ordinary shares $ 23,046 $ (2,344 ) $ (17,092 ) Denominator: Denominator for basic net income (loss) per share - weighted average number of Ordinary shares 78,579,013 80,296,581 81,149,687 Effect of dilutive securities: Employee stock options and RSU 2,442,514 - - Denominator for diluted net income (loss) per share - adjusted weighted average number of shares $ 81,021,527 $ 80,296,581 $ 81,149,687 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Transaction With Related Parties | Transactions with related parties: Year ended December 31, 2018 2019 2020 Revenues $ 3,336 $ 6,745 $ 5,843 Cost of revenues $ 1,111 $ 1,659 $ 4,715 Research and development expenses $ 1,008 $ 1,248 $ 1,245 Selling and marketing expenses $ 771 $ 763 $ 731 General and administrative expenses $ 1,067 $ 1,002 $ 913 Purchase of property and equipment $ 148 $ 46 $ 274 |
Schedule of Balances With Related Parties | Balances with related parties: December 31, 2019 2020 Trade payables, other accounts payable and accrued expenses $ 1,148 $ 925 Trade Receivables $ 7,378 $ 13,117 |
GENERAL (Narrative) (Details)
GENERAL (Narrative) (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
General [Line Items] | |||||
Total investment amount under other non-current assets | $ 1,628 | ||||
Compass Networks [Member] | |||||
General [Line Items] | |||||
Interest rate | 10.00% | ||||
Percentage of acquisitions | 11.00% | 14.00% | |||
Agreement amount | $ 1,500 | $ 500 | |||
Software license agreement capitalized | $ 1,300 | ||||
Loan amount | $ 538 | ||||
Cash consideration | $ 833 | ||||
Total investment amount under other non-current assets | $ 1,800 | $ 1,628 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Income tax benefit realization threshold | 50.00% | ||
Warranty income (expense) | $ 178 | $ 654 | $ (83) |
Warranty provision | 1,274 | 1,452 | |
Trade receivables sold | 21,993 | 10,422 | |
Accrued severance pay | 9,282 | 8,539 | |
Financial expense related to factoring arrangements | 575 | 506 | 585 |
Severance expense | $ 2,538 | $ 2,336 | $ 2,107 |
Outstanding options and RSU's excluded from the calculations of diluted net earnings per share due to their anti-dilutive effect | 4,204,381 | 3,473,312 | 2,426,689 |
Impairment of long lived assets | |||
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Warranty period | 1 year | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Warranty period | 3 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule Of Annual Depreciation Rates) (Details) | Dec. 31, 2020 |
Computers, manufacturing and peripheral equipment [Member] | Minimum [Member] | |
Significant Accounting Policies [Line Items] | |
Depreciation rate | 6.00% |
Computers, manufacturing and peripheral equipment [Member] | Maximum [Member] | |
Significant Accounting Policies [Line Items] | |
Depreciation rate | 33.00% |
Office furniture and equipment [Member] | |
Significant Accounting Policies [Line Items] | |
Depreciation rate | 15.00% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule Of Stock Option Granted Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Volatility, minimum | 60.00% | 53.00% | 53.00% |
Volatility, maximum | 85.00% | 65.00% | 62.00% |
Risk free interest, minimum | 0.10% | 1.20% | 1.80% |
Risk free interest, maximum | 1.00% | 2.70% | 2.90% |
Early exercise multiple, minimum | 1.5 | 1.3 | 2 |
Early exercise multiple, maximum | 1.6 | 2.3 | 2.3 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of January 1, 2020 | $ (8,666) | ||
Other comprehensive income before reclassifications | 823 | ||
Amounts reclassified from AOCI | (225) | ||
Other comprehensive income | 598 | $ 542 | $ (2,037) |
Balance as of December 31, 2020 | (8,068) | (8,666) | |
Foreign Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of January 1, 2020 | (8,984) | ||
Other comprehensive income before reclassifications | (929) | ||
Amounts reclassified from AOCI | |||
Other comprehensive income | (929) | ||
Balance as of December 31, 2020 | (9,913) | (8,984) | |
Unrealized Gains (Losses) on Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of January 1, 2020 | 318 | ||
Other comprehensive income before reclassifications | 1,752 | ||
Amounts reclassified from AOCI | (225) | ||
Other comprehensive income | 1,527 | ||
Balance as of December 31, 2020 | $ 1,845 | $ 318 |
OTHER ACCOUNTS RECEIVABLE AND_3
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets [Abstract] | ||
Government authorities | $ 5,726 | $ 5,168 |
Deferred charges and prepaid expenses | 5,743 | 3,639 |
Deposits receivable | 504 | 532 |
Advances to suppliers | 230 | 357 |
Hedging asset | 1,937 | 372 |
Other | 615 | 965 |
Other accounts receivable and prepaid expenses, Total | $ 14,755 | $ 11,033 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 19,764 | $ 18,211 | |
Work in progress | 194 | 349 | |
Finished products | 30,669 | 43,572 | |
Inventories, Net | 50,627 | 62,132 | |
Inventory write-off | 2,919 | $ 4,836 | $ 2,814 |
Outstanding inventory purchase orders | $ 20,750 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 128,620 | $ 124,437 | |
Accumulated depreciation | 96,872 | 89,572 | |
Depreciated cost | 31,748 | 34,865 | |
Depreciation expenses | 10,668 | 9,555 | $ 7,758 |
Changes of property and equipment | 1,562 | 1,058 | |
Computers, manufacturing, peripheral equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 125,097 | 120,796 | |
Accumulated depreciation | 94,294 | 86,892 | |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,959 | 1,925 | |
Accumulated depreciation | 1,500 | 1,577 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,564 | 1,716 | |
Accumulated depreciation | $ 1,078 | $ 1,103 |
INTANGIBLE ASSETS, NET (Schedul
INTANGIBLE ASSETS, NET (Schedule Of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | $ 6,646 | $ 8,034 | |
Intangible assets, net | $ 6,117 | 7,898 | |
Useful lives | 7 years | ||
Amortization expense | $ 393 | 136 | $ 0 |
Intangible assets acquired | 412 | 3,274 | $ 3,412 |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 3,767 | 5,155 | |
Intangible assets, net | 3,767 | 5,155 | |
Intangible assets acquired | 412 | ||
Intangible assets acquired, not resulted in cash flows | 18 | ||
Software development costs [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 2,879 | 2,879 | |
Accumulated amortization | 529 | 136 | |
Intangible assets, net | 2,350 | $ 2,743 | |
5G [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 1,800 |
OTHER ACCOUNTS PAYABLE AND AC_3
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Employees and payroll accruals | $ 12,617 | $ 12,321 |
Provision for warranty costs | 1,274 | 1,452 |
Government authorities | 1,612 | 2,071 |
Accrued expenses | 2,879 | 3,675 |
Advanced payments from customers | 4,351 | 1,731 |
Hedging Liability | 281 | 112 |
Other | 1,034 | 1,393 |
Other accounts payable and accrued expenses | $ 24,048 | $ 22,755 |
CREDIT LINES (Narrative) (Detai
CREDIT LINES (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity under the credit agreement | $ 70,000 | |
Credit facility for loans | 50,000 | |
Previous loan value under original Credit Facility | $ 10,000 | |
Decrease in bank gaurantees per terms of amended Credit Facility | $ 15,000 | |
Line of credit outstanding amount | 50,000 | |
Line of credit utilized | $ 5,000 | |
Expiration date | Jun. 30, 2021 | |
Allowed factoring amount | $ 20,000 | |
Three Specific Customers [Member] | ||
Debt Instrument [Line Items] | ||
Allowed factoring amount | $ 60,000 | |
Minimum [Member] | Libor [Member] | ||
Debt Instrument [Line Items] | ||
Libor spread | 2.10% | |
Maximum [Member] | Libor [Member] | ||
Debt Instrument [Line Items] | ||
Libor spread | 2.60% |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of Fair Value of Derivative Contracts) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other accounts receivable and prepaid expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | $ 1,937 | $ 373 |
Other accounts payable and accrued expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 281 | 112 |
Derivatives designated as hedging instruments [Member] | Currency forward contracts [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 35,089 | 29,621 |
Derivatives designated as hedging instruments [Member] | Currency forward contracts [Member] | Other accounts receivable and prepaid expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 1,847 | 318 |
Derivatives designated as hedging instruments [Member] | Currency forward contracts [Member] | Other accounts payable and accrued expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 2 | |
Derivatives not designated as hedging instruments [Member] | Currency forward and option contracts [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 31,207 | 28,532 |
Derivatives not designated as hedging instruments [Member] | Currency forward and option contracts [Member] | Other accounts receivable and prepaid expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | 90 | 55 |
Derivatives not designated as hedging instruments [Member] | Currency forward and option contracts [Member] | Other accounts payable and accrued expenses [Member] | ||
Derivative [Line Items] | ||
Total derivatives | $ 279 | $ 112 |
DERIVATIVE INSTRUMENTS (Sched_2
DERIVATIVE INSTRUMENTS (Schedule of Derivative Contracts on Consolidated Statements of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Operating income (expenses) | $ 225 | $ 895 |
Financial income (expenses) | $ (894) | $ (207) |
DERIVATIVE INSTRUMENTS (Sched_3
DERIVATIVE INSTRUMENTS (Schedule Of Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives instruments | $ 1,655 | $ 260 |
Total assets | 1,655 | 260 |
Fair Value Inputs Level 2 [Member] | ||
Derivatives instruments | 1,655 | 260 |
Total assets | $ 1,655 | $ 260 |
CREDIT LOSSES (Schedule of Allo
CREDIT LOSSES (Schedule of Allowance for Credit Losses) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Receivables [Abstract] | |
Balance, at beginning of period | $ 4,236 |
Cumulative effect of adoption of ASU Topic 326 | 700 |
Provision for expected credit losses | 1,636 |
Amounts written off charged against the allowance and others | (374) |
Balance, at end of period | $ 6,198 |
PENSION LIABILITIES, NET (Narra
PENSION LIABILITIES, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability, Defined Benefit Plan [Abstract] | |||
Net periodic benefit cost, discount rate | 1.70% | ||
Actuarial loss | $ 241 | $ 361 | $ 97 |
PENSION LIABILITIES, NET (Sched
PENSION LIABILITIES, NET (Schedule Of Changes In Projected Benefit Obligations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability, Defined Benefit Plan [Abstract] | |||
Projected benefit obligation at beginning of year | $ 2,368 | $ 2,177 | |
Service cost | 12 | $ 16 | |
Interest cost | 53 | 47 | 47 |
Expenses paid | (201) | (203) | |
Exchange rates differences | 49 | (26) | |
Actuarial loss | 241 | 361 | |
Projected benefit obligation at end of year | $ 2,510 | $ 2,368 | $ 2,177 |
PENSION LIABILITIES, NET (Sch_2
PENSION LIABILITIES, NET (Schedule Of Assumptions Used) (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Liability, Defined Benefit Plan [Abstract] | ||
Discount rate | 1.70% | 2.30% |
Rate of compensation increase | 2.25% | 2.25% |
PENSION LIABILITIES, NET (Summa
PENSION LIABILITIES, NET (Summary Of Components Of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Liability, Defined Benefit Plan [Abstract] | |||
Service cost | $ 12 | $ 16 | |
Interest cost | 53 | 47 | 47 |
Net periodic benefit cost | $ 53 | $ 59 | $ 63 |
PENSION LIABILITIES, NET (Sch_3
PENSION LIABILITIES, NET (Schedule Of Expected Benefit Payments) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Liability, Defined Benefit Plan [Abstract] | |
2021 | $ 191 |
2022 | 164 |
2023 | 156 |
2024 | 149 |
2025 and thereafter | 1,850 |
Expected benefit payments, total | $ 2,510 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
May 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020ILS (₪) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($) | |
Operating Leased Assets [Line Items] | |||||||
Bank guarantees | $ 45,847 | $ 74,116 | $ 29,100 | ||||
Down payment receivables | $ 29,100 | ||||||
Income from OCS grants | 996 | $ 801 | $ 1,174 | ||||
Damages sought by plaintiff | $ 75,000 | ||||||
Plaintiff payment | ₪ | ₪ 40,000 | ||||||
Paycheck Protection Program Loan [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Interest rate | 1.00% | ||||||
Proceeds from loan | $ 979 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Weighted average remaining lease term | 3 years |
Weighted average discount rate | 6.08% |
Lease expiration period | 10 years |
Estimated total future lease obligation | $ 18,700 |
LEASES (Schedule of Components
LEASES (Schedule of Components of Lease Expense and Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of lease expense | ||
Operating lease cost | $ 5,484 | $ 5,624 |
Short-term lease | 43 | 75 |
Total lease expenses | 5,527 | 5,699 |
Supplemental cash flow information | ||
Cash paid for amounts included in the measurement of lease liabilities | 5,489 | 5,718 |
Supplemental non-cash information related to lease liabilities arising from obtaining ROU assets | $ 1,773 | $ 8,346 |
LEASES (Schedule of Maturities
LEASES (Schedule of Maturities of Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 3,286 |
2022 | 2,004 |
2023 | 1,341 |
2024 | 374 |
2025 and thereafter | 840 |
Total operating lease payments | 7,845 |
Less: imputed interest | 822 |
Present value of lease liability | $ 7,023 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Vesting period | 4 years | ||
Expiration period | 10 years | ||
Ordinary shares reserved for issuance | 8,639,000 | ||
Ordinary shares available for future grant | 1,133,883 | ||
Total intrinsic value of options exercised | $ 770 | $ 626 | $ 4,617 |
Total unrecognized compensation cost | $ 1,662 | $ 2,053 | $ 1,980 |
Additional Shares authorized | 16,256,688 | ||
Minimum [Member] | |||
Expiration period | 6 years | ||
Maximum [Member] | |||
Expiration period | 10 years | ||
Stock Option [Member] | |||
Weighted average grant date fair value of options granted | $ 1.06 | $ 1.39 | $ 1.79 |
RSU [Member] | |||
Weighted average grant date fair value of options granted | $ 2.11 | $ 2.79 | $ 3.23 |
Weighted average period | 1 year | ||
Total unrecognized compensation cost | $ 1,730 |
SHAREHOLDERS' EQUITY (Summary O
SHAREHOLDERS' EQUITY (Summary Of Stock Options Granted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of options | ||
Outstanding at beginning of year | 7,075,600 | |
Granted | 1,241,930 | |
Exercised | (851,958) | |
Forfeited or expired | (1,226,843) | |
Outstanding at end of year | 6,238,729 | 7,075,600 |
Options exercisable at end of the year | 4,017,763 | |
Vested and expected to vest | 5,806,504 | |
Weighted average exercise price | ||
Outstanding at beginning of year | $ 3.64 | |
Granted | 2.32 | |
Exercised | 1.44 | |
Forfeited or expired | 4.36 | |
Outstanding at end of year | 3.52 | $ 3.64 |
Options exercisable at end of the year | 4.05 | |
Vested and expected to vest | $ 3.59 | |
Weighted-average remaining contractual term | ||
Outstanding at end of year | 3 years 2 months 1 day | 3 years 3 months 18 days |
Options exercisable at end of the year | 2 years 2 months 8 days | |
Vested and expected to vest | 3 years 7 days | |
Aggregate intrinsic value | ||
Outstanding at beginning of year | $ 1,366 | |
Outstanding at end of the year | 2,654 | $ 1,366 |
Options exercisable at end of the year | 1,938 | |
Vested and expected to vest | $ 2,502 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of RSUs Granted) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Number of Units | |
Granted | 1,241,930 |
Vested and expected to vest | 5,806,504 |
Aggregate intrinsic value | |
Vested and expected to vest | $ | $ 2,502 |
RSU [Member] | |
Number of Units | |
Unvested at beginning of year | 373,623 |
Granted | 160,100 |
Vested | (188,603) |
Forfeited | (35,134) |
Unvested at end of the year | 309,986 |
Vested and expected to vest | 231,013 |
Aggregate intrinsic value | |
Unvested at beginning of year | $ | $ 785 |
Unvested at end of the year | $ | 862 |
Vested and expected to vest | $ | $ 642 |
SHAREHOLDERS' EQUITY (Summary_2
SHAREHOLDERS' EQUITY (Summary Of Stock Options And RSUs Granted Separated Into Ranges Of Exercise Price) (Details) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options and RSUs outstanding | shares | 6,548,715 |
Options and RSUs exercisable | shares | 4,017,763 |
RSUs 0.0 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | $ 0 |
Exercise price, upper range limit | $ 0 |
Options and RSUs outstanding | shares | 309,986 |
Outstanding options, Weighted average exercise price | $ 0 |
Options and RSUs exercisable | shares | |
Exercisable options, Weighted average exercise price | $ 0 |
0.01-2.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 0.01 |
Exercise price, upper range limit | $ 2 |
Options and RSUs outstanding | shares | 883,864 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 10 months 13 days |
Outstanding options, Weighted average exercise price | $ 1.24 |
Options and RSUs exercisable | shares | 853,245 |
Exercisable options, Remaining contractual life (in years) | 8 months 26 days |
Exercisable options, Weighted average exercise price | $ 1.22 |
2.01-4.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 2.01 |
Exercise price, upper range limit | $ 4 |
Options and RSUs outstanding | shares | 4,291,793 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 4 years 1 month 9 days |
Outstanding options, Weighted average exercise price | $ 2.62 |
Options and RSUs exercisable | shares | 2,155,157 |
Exercisable options, Remaining contractual life (in years) | 3 years 3 months 3 days |
Exercisable options, Weighted average exercise price | $ 2.70 |
4.01-6.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 4.01 |
Exercise price, upper range limit | $ 6 |
Options and RSUs outstanding | shares | 302,654 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 2 years 8 months 8 days |
Outstanding options, Weighted average exercise price | $ 4.59 |
Options and RSUs exercisable | shares | 248,943 |
Exercisable options, Remaining contractual life (in years) | 2 years 4 months 13 days |
Exercisable options, Weighted average exercise price | $ 4.67 |
6.01-8.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 6.01 |
Exercise price, upper range limit | $ 8 |
Options and RSUs outstanding | shares | 15,000 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 1 year 9 months |
Outstanding options, Weighted average exercise price | $ 6.21 |
Options and RSUs exercisable | shares | 15,000 |
Exercisable options, Remaining contractual life (in years) | 1 year 9 months |
Exercisable options, Weighted average exercise price | $ 6.21 |
8.01-10.00 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 8.01 |
Exercise price, upper range limit | $ 10 |
Options and RSUs outstanding | shares | 365,668 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 1 year 3 months 21 days |
Outstanding options, Weighted average exercise price | $ 8.92 |
Options and RSUs exercisable | shares | 365,668 |
Exercisable options, Remaining contractual life (in years) | 1 year 3 months 21 days |
Exercisable options, Weighted average exercise price | $ 8.92 |
10.01-13.04 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit | 10.01 |
Exercise price, upper range limit | $ 13.04 |
Options and RSUs outstanding | shares | 379,750 |
Outstanding options, Weighted average remaining contractual life (years) for outstanding options | 1 month 20 days |
Outstanding options, Weighted average exercise price | $ 12.80 |
Options and RSUs exercisable | shares | 379,750 |
Exercisable options, Remaining contractual life (in years) | 1 month 20 days |
Exercisable options, Weighted average exercise price | $ 12.80 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule Of Equity-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total share-based compensation expense | $ 1,662 | $ 2,053 | $ 1,980 |
Cost of Revenue [Member] | |||
Total share-based compensation expense | 110 | 71 | 42 |
Research And Development Expense [Member] | |||
Total share-based compensation expense | 243 | 366 | 313 |
Selling And Marketing Expense [Member] | |||
Total share-based compensation expense | 545 | 708 | 640 |
General And Administrative Expense [Member] | |||
Total share-based compensation expense | $ 764 | $ 908 | $ 985 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Taxes On Income [Line Items] | |||
Period of tax exemption | 2 years | ||
Period in which investment must be made | 3 years | ||
Experation period since approval | 14 years | ||
Experation period since enterpise began operating | 12 years | ||
Effective corporate income tax rate | 23.00% | 23.00% | 23.00% |
Net operating losses | $ 188,435 | ||
Capital loss | 8,298 | ||
Accrued interest and penalties | 134 | ||
Valuation allowance amount | $ 96,076 | $ 89,320 | |
First Two Years [Member] | Minimum [Member] | |||
Taxes On Income [Line Items] | |||
Foreign investors' company tax benefits pecent | 10.00% | ||
First Two Years [Member] | Maximum [Member] | |||
Taxes On Income [Line Items] | |||
Foreign investors' company tax benefits pecent | 25.00% | ||
Preferred Technological Enterprise income [Member] | |||
Taxes On Income [Line Items] | |||
Tax rate reduction percent | 12.00% | ||
Law For Encouragement Of Industry Taxes [Member] | |||
Taxes On Income [Line Items] | |||
Industrial company defined as a company resident in Israel based on minimum percentage of income derived from an industrial enterprise owned by it | 90.00% | ||
Amortization period for deferred stock issuance costs | 3 years | ||
Norway [Member] | |||
Taxes On Income [Line Items] | |||
Net operating losses | $ 20,116 | ||
Brazil [Member] | |||
Taxes On Income [Line Items] | |||
Net operating losses | $ 34,040 | ||
Annual limit against taxable income | 30.00% | ||
Domestic Country [Member] | Minimum [Member] | |||
Taxes On Income [Line Items] | |||
Effective corporate income tax rate | 21.00% | ||
Domestic Country [Member] | Maximum [Member] | |||
Taxes On Income [Line Items] | |||
Effective corporate income tax rate | 35.00% |
TAXES ON INCOME (Schedule Of In
TAXES ON INCOME (Schedule Of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 2,641 | $ 2,734 | $ 3,350 |
Deferred | (23) | (258) | (6,601) |
Domestic (Israel) | 839 | 781 | (5,919) |
Foreign | 1,779 | 1,695 | 2,668 |
Taxes on income (benefit) | $ 2,618 | $ 2,476 | $ (3,251) |
TAXES ON INCOME (Schedule Of De
TAXES ON INCOME (Schedule Of Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 75,926 | $ 71,653 |
Temporary differences mainly relating to Research and Development, reserves and allowances | 28,429 | 25,773 |
Deferred tax asset before valuation allowance | 104,355 | 97,426 |
Valuation allowance | (96,076) | (89,320) |
Deferred tax asset | $ 8,279 | $ 8,106 |
TAXES ON INCOME (Schedule Of _2
TAXES ON INCOME (Schedule Of Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (24,192) | $ (2,171) | $ 17,921 |
Foreign | 10,697 | 2,952 | 1,874 |
Loss before taxes | $ (13,495) | $ 781 | $ 19,795 |
TAXES ON INCOME (Schedule Of _3
TAXES ON INCOME (Schedule Of Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before taxes as reported in the consolidated statements of operations | $ (13,495) | $ 781 | $ 19,795 |
Statutory tax rate | 23.00% | 23.00% | 23.00% |
Theoretical tax expenses (income) on the above amount at the Israeli statutory tax rate | $ (3,104) | $ 180 | $ 4,553 |
Non-deductible expenses | (111) | 519 | 1,299 |
Non-deductible expenses related to employee stock options | 383 | 472 | 376 |
Changes in tax rate | (5) | 179 | |
Losses and other temporary differences in respect of which no deferred taxes were generated (including changes in valuation allowance) | 5,318 | 977 | (4,068) |
Recognition of deferred taxes during the year, for which valuation allowance was provided in prior years | (7,200) | ||
Other | 132 | 333 | 1,610 |
Actual tax expense (benefit) | $ 2,618 | $ 2,476 | $ (3,251) |
TAXES ON INCOME (Schedule Of Ch
TAXES ON INCOME (Schedule Of Changes In Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Beginning balance | $ 2,492 | $ 2,373 |
Decreases in tax positions for prior years | (708) | (406) |
Increases related to tax positions taken during prior years | 184 | 40 |
Increase related to tax positions taken during the current year | 453 | 485 |
Ending balance | $ 2,421 | $ 2,492 |
REVENUES (Schedule of Significa
REVENUES (Schedule of Significant Changes in Deferred Revenue) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues [Abstract] | ||
Balance, beginning of the period | $ 7,999 | $ 3,873 |
New performance obligations | 5,210 | 11,195 |
Reclassification to revenue as a result of satisfying performance obligations | (2,222) | (7,069) |
Balance, end of the period | 10,987 | 7,999 |
Less: long-term portion of deferred revenue | 7,495 | 6,265 |
Current portion, end of period | $ 3,492 | $ 1,734 |
REVENUES (Schedule of Remaining
REVENUES (Schedule of Remaining Performance Obligations) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unsatisfied performance obligations | $ 5,210 | $ 11,195 |
2021 [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unsatisfied performance obligations | 4,320 | |
2022 [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unsatisfied performance obligations | 216 | |
2023 and thereafter [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unsatisfied performance obligations | $ 8,129 |
SEGMENTS, CUSTOMERS AND GEOGR_3
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Schedule Of Revenues From Sales To Unaffiliated Customers) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of reportable segments | item | 1 | ||
Revenues | $ 262,881 | $ 285,583 | $ 343,874 |
Property and equipment, net | 31,748 | 34,865 | |
North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 38,165 | 42,474 | 41,384 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 44,832 | 42,439 | 38,919 |
Africa [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 23,497 | 25,614 | 23,690 |
Asia-Pacific and Middle East [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 47,677 | 53,948 | 47,320 |
India [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 62,047 | 49,748 | 131,201 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 46,663 | 71,360 | $ 61,360 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | 26,423 | 29,165 | |
Others [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 5,325 | $ 5,700 |
SEGMENTS, CUSTOMERS AND GEOGR_4
SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Schedule Of Major Customer Data As Percentage Of Total Revenues) (Details) - Sales Revenue Goods Net [Member] | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | |||
Percentage of total revenues | 21.10% | ||
Affiliate Companies [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of total revenues | 19.60% | ||
Affiliate Companies [Member] | Customer [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of total revenues | 22.10% | 14.00% | |
Affiliate Companies [Member] | Customer Two [Member] | |||
Concentration Risk [Line Items] | |||
Percentage of total revenues | 11.80% |
SELECTED STATEMENTS OF OPERAT_3
SELECTED STATEMENTS OF OPERATIONS DATA (Narrative) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Quarterly Financial Data [Abstract] | |
Income (loss) resulting from devaluation of the local currency in Venezuela | $ 969 |
SELECTED STATEMENTS OF OPERAT_4
SELECTED STATEMENTS OF OPERATIONS DATA (Schedule Of Financial Expenses and Others, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Financial income: | ||||
Interest on deposits | $ 79 | $ 111 | $ 111 | |
Foreign currency translation differences and derivatives | [1] | 1,330 | 190 | 3,981 |
Others | 807 | |||
Total gross financial income | 2,216 | 301 | 4,092 | |
Financial expenses: | ||||
Bank charges and interest on loans | (4,130) | (3,787) | (4,597) | |
Foreign currency translation differences and derivatives | (3,716) | (2,627) | (5,844) | |
Others | (293) | (408) | ||
Total gross financial expenses | (8,139) | (6,822) | (10,441) | |
Financial expenses and others, net | $ (5,923) | $ (6,521) | $ (6,349) | |
[1] | During 2018 the Company recorded $ |
SELECTED STATEMENTS OF OPERAT_5
SELECTED STATEMENTS OF OPERATIONS DATA (Schedule Of Net income per share) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Numerator for basic and diluted net income (loss) per share - income (loss) available to shareholders of Ordinary shares | $ (17,092) | $ (2,344) | $ 23,046 |
Denominator: | |||
Denominator for basic net income (loss) per share - weighted average number of Ordinary shares | 81,149,687 | 80,296,581 | 78,579,013 |
Effect of dilutive securities: | |||
Employee stock options and RSU | $ 2,442,514 | ||
Denominator for diluted net income (loss) per share - adjusted weighted average number of shares | 81,149,687 | 80,296,581 | 81,021,527 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Amount of surveys services | $ 900 | $ 490 | |
Revenues | $ 5,843 | $ 6,745 | 3,336 |
Compass Networks [Member] | |||
Related Party Transaction [Line Items] | |||
Cash consideration | $ 833 | ||
Percentage of acquisitions | 11.00% | 14.00% | |
Rad Bynet [Member] | |||
Related Party Transaction [Line Items] | |||
Reimbursements for services provided | 1,801 | $ 2,242 | $ 1,856 |
Fitel [Member] | |||
Related Party Transaction [Line Items] | |||
Revenues | 5,594 | ||
Inventories [Member] | Rad Bynet [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 83 | 152 | 78 |
Purchase Of Property And Equpment [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 274 | 46 | 148 |
Purchase Of Property And Equpment [Member] | Rad Bynet [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 274 | 46 | 148 |
Rent And Maintenance [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | $ 2,099 | $ 1,936 | $ 1,960 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS (Schedule Of Transaction With Related Parties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 5,843 | $ 6,745 | $ 3,336 |
Cost of revenues | 4,715 | 1,659 | 1,111 |
Research And Development Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 1,245 | 1,248 | 1,008 |
Selling And Marketing Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 731 | 763 | 771 |
General And Administrative Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | 913 | 1,002 | 1,067 |
Purchase Of Property And Equpment [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses | $ 274 | $ 46 | $ 148 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS (Schedule Of Balances With Related Parties) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Trade payables, other accounts payable and accrued expenses | $ 925 | $ 1,148 |
Trade Receivables | $ 13,117 | $ 7,378 |