Exhibit 99.1
CERAGON
Networks (R)
[GRAPHIC OMITTED][GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
CERAGON NETWORKS(R) REPORTS THIRD QUARTER 2002 FINANCIAL RESULTS
TEL AVIV, ISRAEL, OCTOBER 24, 2002- Ceragon Networks Ltd. (NASDAQ:
CRNT), www.ceragon.com, a global provider of high-capacity broadband wireless
systems, today reported results for the third quarter ending September 30, 2002.
Revenues for the third quarter increased to $5.0 million, as compared to
revenues of $3.1 million for the third quarter of 2001 and to revenues of $4.0
million for the second quarter of 2002. This represents an increase of 61% as
compared to the third quarter of 2001, and an increase of 26% as compared to the
second quarter of 2002. This past quarter was also the fourth quarter of
consecutive revenue growth for Ceragon.
Pro-forma gross profit (*) for the third quarter of 2002 was $1.5
million, or 30.5% of revenues. This compares to pro-forma gross profit for the
third quarter of 2001 of $0.3 million, or 10.1% of revenues and to pro-forma
gross profit for the second quarter of 2002 of $1.2 million, or 29.0% of
revenues. Pro-forma net loss for the third quarter of 2002 decreased to $(2.6)
million, or $(0.12) basic and diluted net loss per ordinary share. This compares
to pro-forma net loss for the third quarter of 2001 of $(3.9) million, or
$(0.19) basic and diluted net loss per ordinary share and to pro-forma net loss
for the second quarter of 2002 of $(3.0) million, or $(0.14) basic and diluted
net loss per ordinary share. For an explanation of pro-forma results see the
notes at * below.
The company ended the third quarter of 2002 with $45.5 million in cash
and liquid investments, as compared to $48.0 million in cash and liquid
investments at the end of the previous quarter.
"Focusing on our three target markets has resulted in a fourth
consecutive quarter of growth and a fifth consecutive quarter of improving
bottom line results at Ceragon," said Shraga Katz, president and CEO, Ceragon
Networks Ltd. "During this past quarter, we continued generating new and
follow-on orders and recurring revenues from cellular carriers, incumbent
operators and enterprise organizations. We also expanded our base of new
customers and extended our geographic reach into additional regions within
Europe and Asia."
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THIRD QUARTER 2002 RESULTS-2
A conference call discussing Ceragon's results for the second quarter
of 2002 will take place today, October 24, 2002, at 11:00 a.m. (EDT). Details
can be found on Ceragon's website at www.ceragon.com. The live call and its
replay will be accessible on Ceragon's website. The replay will be available
through October 28, 2002.
* 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 September 30, 2001 exclude one-time charges of $17.8
million for an inventory write-down and a fixed asset impairment presented in
cost of revenues. The pro-forma results for the nine months ended September 30,
2001 and 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 LTD.
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 a built-in SONET/SDH add-drop multiplexer (ADM). More information is
available at www.ceragon.com.
---------------
Ceragon Networks(R) is a registered trademark of Ceragon Networks Ltd. and
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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THIRD QUARTER 2002 RESULTS-3
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
PRO- FORMA(*)
THREE MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
------------------------------- ------------------------------ -----------------
2002 2001 2002 2001 2001
------------------------------------------------------------------------------------
UNAUDITED
------------------------------------------------------------------------------------
Revenues $ 5,047 $ 3,142 $ 12,323 $ 21,578 $ 24,852
Cost of revenues 3,507 2,824 8,817 13,842 16,451
------------ ------------ ------------- ------------- -----------------
Gross profit 1,540 318 3,506 7,736 8,401
------------ ------------ ------------- ------------- -----------------
Operating expenses:
Research and development 2,285 2,948 6,781 10,534 12,967
Less: participation by the Chief
Scientist of the Government of
Israel 480 716 1,326 2,266 2,660
------------ ------------ ------------- ------------- -----------------
Research and development, net 1,805 2,232 5,455 8,268 10,307
Sales and marketing 2,236 2,093 6,820 9,795 11,924
General and administrative 480 599 1,521 2,553 3,138
------------ ------------ ------------- ------------- -----------------
Total operating expenses 4,521 4,924 13,796 20,616 25,3690
------------ ------------ ------------- ------------- -----------------
Operating loss (2,981) (4,606) (10,290) (12,880) (16,968)
Financial income, net 369 683 1,236 2,299 2,769
------------ ------------ ------------- ------------- -----------------
Net loss $ (2,612) $ (3,923) $ (9,054) $ (10,581) $ (14,199)
============ ============ ============= ============= =================
Basic and diluted net loss per share $ (0.12) $ (0.19) $ (0.41) $ (0.51) $ (0.67)
============ ============ ============= ============= =================
Weighted average number of shares used
in computing basic and diluted net 22,425,096 21,064,343 22,334,970 20,863,131 21,099,336
loss per share ============ ============ ============= ============= =================
* 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 September 30, 2001 exclude one-time charges of $17.8
million for an inventory write-down and a fixed asset impairment presented in
cost of revenues. The pro-forma results for the nine months ended September 30,
2001 and 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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THIRD QUARTER 2002 RESULTS-4
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
YEAR ENDED
THREE MONTHS ENDED NINE MONTHS ENDED DECEMBER
SEPTEMBER 30, SEPTEMBER 30, 31,
------------------------------- ------------------------------- -----------------
2002 2001 2002 2001 2001
-------------- -------------- -------------- -------------- -----------------
UNAUDITED AUDITED
-----------------------------------------------------------------------------------
Revenues $ 5,047 $ 3,142 $ 12,323 $ 21,578 $ 24,852
Cost of revenues 3,507 20,605 8,817 42,673 45,282
------------ ------------ ------------- ------------- -----------------
Gross profit (loss) 1,540 (17,463) 3,506 (21,095) (20,430)
Operating expenses:
Research and development 2,285 2,948 6,781 10,534 12,967
Less: participation by the Chief
Scientist of the Government of Israel 480 716 1,326 2,266 2,660
------------ ------------ ------------- ------------- -----------------
Research and development, net 1,805 2,232 5,455 8,268 10,307
Sales and marketing 2,236 2,093 6,820 9,795 11,924
General and administrative 480 599 1,521 5,185 5,770
Amortization of deferred stock
compensation (a) 679 1,439 2,399 5,226 6,431
Restructuring costs - - - 4,750 4,750
------------ ------------ ------------- ------------- -----------------
Total operating expenses 5,200 6,363 16,195 33,224 39,182
------------ ------------ ------------- ------------- -----------------
Operating loss (3,660) (23,826) (12,689) (54,319) (59,612)
Financial income, net 369 683 1,236 2,299 2,769
------------ ------------ ------------- ------------- -----------------
Net loss $ (3,291) $ (23,143) $ (11,453) $ (52,020) $ (56,843)
============ ============ ============= ============= =================
Basic and diluted net loss per share $ (0.15) $ (1.10) $ (0.51) $ (2.49) $ (2.69)
============ ============ ============= ============= =================
Weighted average number of shares used in
computing basic and diluted net loss per
share 22,425,096 21,064,343 22,334,970 20,863,131 21,099,336
============ ============ ============= ============= =================
(a) Amortization of deferred stock
compensation relates to the
following:
Cost of revenues $ 49 $ 90 $ 167 $ 314 $ 400
Research and development 218 525 781 1,863 2,248
Sales and marketing 238 426 862 1,596 1,984
General and administrative 174 398 589 1,453 1,799
------------ ------------ ------------- ------------- -----------------
Total amortization of deferred
-----
stock compensation $ 679 $ 1,439 $ 2,399 $ 5,226 $ 6,431
============ ============ ============= ============= =================
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THIRD QUARTER 2002 RESULTS-5
CONSOLIDATED BALANCE SHEETS
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
SEPTEMBER DECEMBER
30, 31,
2002 2001
------------------ ------------------
UNAUDITED AUDITED
------------------ ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 10,188 $ 6,421
Short-term bank deposits 10,174 26,741
Corporate bonds 6,664 19,813
Trade receivables, net 3,312 2,822
Other accounts receivable and prepaid expenses 2,259 2,143
Inventories 7,043 7,377
------------------ ------------------
TOTAL CURRENT ASSETS 39,640 65,317
------------------ ------------------
LONG-TERM INVESTMENTS:
Long-term corporate bonds 11,684 746
Long-term bank deposits 6,818 -
Severance pay funds 1,080 930
------------------ ------------------
TOTAL LONG-TERM INVESTMENTS 19,582 1,676
------------------ ------------------
PROPERTY AND EQUIPMENT, NET 3,901 5,093
------------------ ------------------
TOTAL ASSETS $ 63,123 $ 72,086
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 5,798 $ 5,040
Other accounts payable and accrued expenses 4,072 4,916
------------------ ------------------
TOTAL CURRENT LIABILITIES 9,870 9,956
------------------ ------------------
ACCRUED SEVERANCE PAY 1,655 1,511
------------------ ------------------
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares of NIS 0.01 par value: Authorized: 40,000,000 shares
as of December 31, 2001 and September 30, 2002, respectively; issued
and outstanding: 22,165,196 and 22,459,096 as of December 31, 2001
and September 30, 2002, respectively 56 56
Additional paid-in capital 169,334 169,355
Deferred stock compensation (2,395) (4,848)
Accumulated deficit (115,397) (103,944)
------------------ ------------------
TOTAL SHAREHOLDERS' EQUITY 51,598 60,619
------------------ ------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 63,123 $ 72,086
================== ==================
THIRD QUARTER 2002 RESULTS-5
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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.
###
CONTACT: Linda Pitt
GAJ Services Inc.
859-291-1005
lpitt@gajservices.com
Daphna Golden (Investors)
Ceragon Networks Ltd.
+972-3-645-5513
ir@ceragon.com