[GRAPHIC OMITTED]CERAGON NETWORKS (TM)
FOR IMMEDIATE RELEASE
Ceragon Networks(TM) Reports First Quarter 2002 Financial Results
TEL AVIV, Israel, April 25, 2002 - Ceragon Networks Ltd. (NASDAQ:
CRNT), a global provider of high-capacity broadband wireless systems, today
reported results for the first quarter of 2002, which ended March 31, 2002.
Revenues for the first quarter were $3.3 million, as compared to $3.3 million
for the fourth quarter of 2001.
Pro-forma gross profit (*) for the first quarter was $0.8 million, or
24.6% of revenues, up from a pro-forma gross profit of $0.7 million, or 20.3% of
revenues, in the fourth quarter of 2001. Pro-forma net loss for the first
quarter of 2002 was $(3.4) million, or $(0.15) pro-forma net loss per ordinary
share, as compared to $(3.6) million, or $(0.17) pro-forma net loss per ordinary
share, for the fourth quarter of 2001. The company ended the first quarter of
2002 with $50.6 million in cash and liquid investments. For an explanation of
pro-forma results see the notes at * below.
"During this past quarter, we executed well on our three-part strategy
of focusing on cellular carriers, geographic diversity and product innovation,"
said Shraga Katz, president and CEO, Ceragon Networks Ltd. "Our announcement of
two major cellular backhaul contracts in Scandinavia during the past quarter
represents a major milestone on the path to growth and profitability. In
adhering to our product development strategy, we delivered new, comprehensive
and intelligent networking products designed to help carriers improve the return
on their network investment."
Ceragon announced two products during the last quarter. The first
announcement was the Company's integrated add/drop multiplexer (ADM) - another
industry first for Ceragon, which increased the network functionality of the
FibeAir(TM) product family. The integrated ADM product has the distinct
advantage of enabling cellular carriers to deploy SONET/SDH network rings at a
reduced cost, while improving network management capabilities.
Ceragon also expanded the range of its frequency bands with its 7 and 8
GHz systems, which include innovative hitless, errorless switching capabilities.
Offering extended
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Ceragon Networks Reports First Quarter Results - 2
operating distances, these systems enable Ceragon to expand its product
portfolio to new geographic regions.
A conference call discussing Ceragon's results for the first quarter of
2002 will take place today, April 25, 2002, at 9:00 a.m. (EDT). Details can be
found on Ceragon's website at www.ceragon.com. A replay of the call will be
accessible approximately two hours later on Ceragon's website. The replay will
be available through April 29, 2002, 7:00 p.m. EDT.
* Pro-Forma Financial Presentation
Pro-forma results are presented for informational purposes only. Pro-forma
financial results for all periods presented exclude the effect of stock-based,
non-cash deferred compensation expenses. In addition, the pro-forma results for
the three months ended March 31, 2001 exclude one-time charges of $11.0 million
for inventory write-down presented in cost of revenues and $2.6 million for
doubtful debt presented in general and administrative expenses. The pro-forma
results for the year ended December 31, 2001 exclude one-time charges of $28.8
million for an inventory write-down and a fixed asset impairment presented in
cost of revenues, $2.6 million for doubtful debt presented in general and
administrative expenses, and $4.7 million due to restructuring plans presented
in restructuring costs.
About Ceragon Networks(TM)
Ceragon Networks Ltd. (NASDAQ: CRNT), a pacesetter in broadband wireless
networking systems, enables the rapid and cost-effective deployment of
high-capacity network connectivity. Ceragon's FibeAir(TM) product family was
uniquely designed for cellular operators, enterprises and communications service
providers to progressively build networks to meet the growing demand for
value-added broadband services. The modular FibeAir system operates across
multiple frequencies from 7 to 38 GHz and supports integrated high-capacity
services over IP, SONET/SDH and ATM networks. Ceragon's equipment complies with
North American and international standards and is installed with over 100
customers in more than 35 countries. Ceragon was the first fixed wireless
technology provider to break the 155 Mbps capacity barrier in high-frequency
bands and the first to commercially deploy a wireless 311 Mbps system. Recently,
Ceragon announced another industry first - a high capacity fixed wireless system
with built-in SONET/SDH add-drop multiplexer (ADM). More information is
available at www.ceragon.com.
Ceragon Networks(TM), Ceragon(TM), FibeAir(TM), ConfigAir(TM), CeraView(TM),
CeraMon(TM), EtherAir(TM), QuickAir(TM), QuickAir Partner Program(TM), QuickAir
Partner Certification Program(TM), QuickAir Partner Zone(TM), EncryptAir(TM) and
Microwave Fiber(TM) are trademarks of Ceragon Networks Ltd.
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Ceragon Networks Reports First Quarter Results - 3
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share data)
PRO-FORMA(*)
For the three months For the year
ended ended
March 31 December 31
---------------------------- -------------------
2002 2001 2001
------------ ------------- -------------------
(Unaudited) (Unaudited)
---------------------------- -------------------
Revenues $ 3,282 $ 12,585 $ 24,852
Cost of revenues 2,476 7,039 16,451
------------- -------------- --------------------
Gross profit 806 5,546 8,401
------------- -------------- --------------------
Operating expenses
Research and development 2,185 4,374 12,967
Less: participation by the Chief
Scientist of the Government of Israel 356 902 2,660
------------- -------------- --------------------
Research and development, net 1,829 3,472 10,307
------------- -------------- --------------------
Marketing and selling 2,272 3,918 11,924
General and administrative 499 941 3,138
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Total operating expenses 4,600 8,331 25,369
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Operating loss (3,794) (2,785) (16,968)
Financing income, net 388 844 2,769
------------- -------------- --------------------
Net loss $ (3,406) $ (1,941)$ (14,199)
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Basic and diluted net loss per ordinary share $ (0.15) $ (0.09)$ (0.67)
============= ============== ====================
Weighted average number of ordinary shares
outstanding 22,229,418 20,657,432 21,099,336
============= ============== ====================
(*) Pro-forma Financial Presentation
Pro-forma results are presented for informational purposes only. Pro-forma
financial results for all periods presented exclude the effect of stock-based,
non-cash deferred compensation expenses. In addition, the pro-forma results for
the three months ended March 31, 2001 exclude one-time charges of $11.0 million
for inventory write-down presented in cost of revenues and $2.6 million for
doubtful debt presented in general and administrative expenses. The pro-forma
results for the year ended December 31, 2001 exclude one-time charges of $28.8
million for an inventory write-down and a fixed asset impairment presented in
cost of revenues, $2.6 million for doubtful debt presented in general and
administrative expenses, and $4.7 million due to restructuring plans presented
in restructuring costs.
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Ceragon Networks Reports First Quarter Results - 4
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share data)
For the For the year
three months ended ended
March 31, December 31,
---------------------------- -------------------
2002 2001 2001
------------ ------------- -------------------
(Unaudited) (Audited)
---------------------------- -------------------
Revenues $ 3,282 $ 12,585 $ 24,852
Cost of revenues 2,476 18,089 45,282
------------- -------------- --------------------
Gross profit (loss) before non-cash
compensation expense 806 (5,504) (20,430)
Non cash compensation expense 68 130 400
------------- -------------- --------------------
Gross profit (loss) 738 (5,634) (20,830)
------------- -------------- --------------------
Operating expenses
Research and development, net of non-cash
compensation expense of $313, $741, $2,248 2,185 4,374 12,967
Less: participation by the Chief
Scientist of the Government of Israel 356 902 2,660
------------- -------------- --------------------
Research and development, net 1,829 3,472 10,307
Marketing and selling, net of non-cash
compensation expense of $331, $633, $1,984 2,272 3,918 11,924
General and administrative, net of non-cash
compensation expense of $225, $563, $1,799 499 3,573 5,770
Amortization of deferred compensation 869 1,937 6,031
Restructuring costs - - 4,750
------------- -------------- --------------------
Total operating expenses 5,469 12,900 38,782
------------- -------------- --------------------
Operating loss (4,731) (18,534) (59,612)
Financing income, net 388 844 2,769
------------- -------------- --------------------
Net loss (4,343) (17,690) (56,843)
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Basic and diluted net loss per ordinary share $ (0.20) $ (0.86) $ (2.69)
============= ============== ====================
Weighted average number of ordinary shares
outstanding 22,229,418 20,657,432 21,099,336
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Ceragon Networks Reports First Quarter Results - 5
BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
March 31 December 31
2002 2001
(Unaudited) (Audited)
------------- ---------------
Current assets
Cash and cash equivalents $ 1,218 $ 6,421
Short-term deposits 20,548 26,741
Corporate bonds 11,631 19,813
Trade receivables, net 2,260 2,822
Other receivables 2,421 2,143
Inventories 6,441 7,377
------------- ---------------
Total current assets 44,519 65,317
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Long-term deposits 7,717 -
------------- ---------------
Corporate bonds 9,531 746
------------- ---------------
Property and equipment
Cost 8,110 8,151
Less - accumulated depreciation 3,475 3,058
------------- ---------------
$ 4,635 $ 5,093
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Deposits with insurance companies 982 930
------------- ---------------
Total assets $ 67,384 $ 72,086
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Current liabilities
Trade payables $ 3,939 $ 5,040
Other payables and accrued expenses 4,660 4,916
------------- ---------------
Total current liabilities 8,599 9,956
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Long-term liabilities
Accrued severance pay 1,553 1,511
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Total liabilities 10,152 11,467
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Shareholders' equity
Share capital
Ordinary shares of NIS 0.01 par value:
Authorized -40,000,000 shares; Issued and outstanding as of
December 31, 2001 and March 31, 2002 - 22,165,196 and
22,309,696,respectively 56 56
Additional paid-in capital 169,360 169,355
Deferred compensation (3,897) (4,848)
Accumulated deficit (108,287) (103,944)
------------- ---------------
Total shareholders' equity 57,232 60,619
------------- ---------------
Total liabilities and shareholders' equity $ 67,384 $ 72,086
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This press release may contain statements concerning Ceragon's future prospects
that are "forward-looking statements" under the Private Securities Litigation
Reform Act of 1995. These statements are based on current expectations and
projections that involve a number of risks and uncertainties. There can be no
assurance that future results will be achieved, and actual results could differ
materially from forecasts and estimates. Important factors that could cause
actual results to differ materially from forecasts and estimates include:
Ceragon's limited operating history and history of losses; Ceragon's dependence
on a limited number of key customers, independent manufacturers and suppliers;
and the demand for Ceragon's products and technology. These risks and
uncertainties, as well as others, are discussed in greater detail in Ceragon's
Annual Report on Form 20-F and Ceragon's other filings with the Securities and
Exchange Commission. Forward-looking statements speak only as of the date on
which they are made and Ceragon undertakes no commitment to revise or update any
forward-looking statement in order to reflect events or circumstances after the
date any such statement is made.
CONTACTS:
Linda Pitt
GAJ Services Inc.
859-291-1005
lpitt@gajservices.com
Daphna Golden (Investors)
Ceragon Networks Ltd.
+972-3-645-5513
ir@ceragon.com
Laura Yatim (Media)
Ceragon Networks Ltd.
+972-3-765-7560
laura@ceragon.com
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