CERAGON Networks
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FOR IMMEDIATE RELEASE
Ceragon Networks(R) Reports First Quarter 2003 Financial Results
TEL AVIV, Israel, May 1, 2003 - Ceragon Networks Ltd. (NASDAQ: CRNT),
www.ceragon.com, a global provider of high-capacity broadband wireless systems,
today reported results for the first quarter, which ended March 31, 2003.
Revenues for the first quarter were $7.0 million, up from $3.3 million for the
first quarter of 2002 and from $6.1 million for the fourth quarter of 2002. This
represents an increase of 114.4% as compared to the first quarter of 2002, and
15.9% as compared to the fourth quarter of 2002. This past quarter was Ceragon's
sixth consecutive quarter of revenue growth.
Gross profit for the first quarter of 2003 increased to $2.6 million,
or 37.0% of revenues. This compares to gross profit for the first quarter of
2002 of $0.8 million, or 24.6% of revenues, and to gross profit for the fourth
quarter of 2002 of $2.1 million, or 34.5% of revenues.
Pro-forma net loss (*) for the first quarter of 2003 improved for the
seventh consecutive quarter to $(1.7) million, or $(0.08) basic and diluted net
loss per ordinary share. This compares to pro-forma net loss for the first
quarter of 2002 of $(3.4) million, or $(0.15) basic and diluted net loss per
ordinary share, and to pro-forma net loss for the fourth quarter of 2002 of
$(2.2) million, or $(0.10) basic and diluted net loss per ordinary share. For an
explanation of pro-forma results see the notes at * below.
The company ended the first quarter of 2003 with $41.3 million in cash
and liquid investments.
"I am very proud of the Ceragon team as we keep showing consistent
improvement across the board, building strong momentum and reinforcing our
leadership position" said Shraga Katz, president and CEO, Ceragon Networks Ltd.
"The revenue growth and improved financial metrics were achieved by our
strategic focus on target markets, geographic expansion and product leadership -
all of which enable us to take increased market share and show substantial
growth."
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Ceragon Reports First Quarter 2003 Results - 2
A conference call discussing Ceragon's results for the first quarter of
2003 will take place today, May 1, 2003, 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 May 5,
2003.
* 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 year ended December 31, 2002, exclude expenses of $83 thousand, presented in
non-recurring expenses (income), net and the pro-forma results for the three
months ended March 31, 2003 exclude income of $82 thousand, presented in
non-recurring expenses (income), net
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT), a pacesetter in broadband wireless
networking systems, enables rapid and cost-effective high-capacity network
connectivity for mobile cellular infrastructure, fixed networks and for private
networks. Ceragon's modular FibeAir(TM) product family operates across multiple
frequencies from 6 to 38 GHz, supports integrated high-capacity services from
155 to 622 Mbps over SONET/SDH, ATM and IP networks, and offers innovative
built-in add/drop multiplexing and encryption functionality to meet the growing
demand for value-added broadband services. Ceragon's FibeAir complies with North
American and international standards and is installed with over 100 customers in
more than 40 countries. More information is available at www.ceragon.com.
Ceragon Networks(R) and CeraView(R) are registered trademarks of Ceragon
Networks Ltd. and Ceragon(TM), FibeAir(TM), PolyView(TM), ConfigAir(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 Reports First Quarter 2003 Results - 3
PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (*)
U.S. dollars in thousands, except share and per share data
Year ended
Three months ended March 31, December 31,
------------------------------
2003 2002 2002
--------------- -------------- --------------------
Unaudited
---------------------------------------------------
Revenues $ 7,037 $ 3,282 $ 18,394
Cost of revenues 4,434 2,476 12,791
--------------- -------------- --------------------
Gross profit 2,603 806 5,603
Operating expenses:
Research and development 2,172 2,185 9,143
Less: participation by the Chief Scientist of the Government
of Israel 450 356 1,870
--------------- -------------- --------------------
Research and development, net 1,722 1,829 7,273
Sales and marketing 2,364 2,272 9,130
General and administrative 510 499 2,031
--------------- -------------- --------------------
Total operating expenses 4,596 4,600 18,434
--------------- -------------- --------------------
Operating loss (1,993) (3,794) (12,831)
Financial income, net 264 388 1,528
--------------- -------------- --------------------
Net loss $ (1,729) $ (3,406) $ (11,303)
=============== ============== ====================
Basic and diluted net loss per share $ (0.08) $ (0.15) $ (0.51)
=============== ============== ====================
Weighted average number of shares used in computing basic and
diluted net loss per share 22,609,179 22,229,418 22,375,939
=============== ============== ====================
* 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 year ended December 31, 2002, exclude expenses of $83 thousand, presented in
non-recurring expenses (income), net and the pro-forma results for the three
months ended March 31, 2003 exclude income of $82 thousand, presented in
non-recurring expenses (income), net
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Ceragon Reports First Quarter 2003 Results - 4
CONSOLIDATED STATEMENTS OF OPERATIONS (*)
U.S. dollars in thousands, except share and per share data
Three months ended March 31, Year ended
December 31,
------------------------------
2003 2002 2002
--------------- -------------- --------------------
Unaudited
------------------------------
Revenues 7,037 3,282 18,394
Cost of revenues 4,434 2,476 12,791
--------------- -------------- --------------------
Gross profit 2,603 806 5,603
Operating expenses:
Research and development 2,172 2,185 9,143
Less: participation by the Chief Scientist of the Government of
Israel 450 356 1,870
--------------- -------------- --------------------
Research and development, net 1,722 1,829 7,273
Sales and marketing, net 2,364 2,272 9,130
General and administrative 510 499 2,031
Amortization of deferred stock compensation (a) 451 937 2,974
Non recurring expenses (income), net (82) - 83
--------------- -------------- --------------------
Total operating expenses 4,965 5,537 21,491
--------------- -------------- --------------------
Operating loss (2,362) (4,731) (15,888)
Financial income, net 264 388 1,528
--------------- -------------- --------------------
Net loss $ (2,098) $ (4,343) $ (14,360)
=============== ============== ====================
Basic and diluted net loss per share $ (0.09) $ (0.20) $ (0.64)
=============== ============== ====================
Weighted average number of shares used in computing basic and
diluted net loss per share 22,609,179 22,229,418 22,375,939
=============== ============== ====================
(a) Amortization of deferred stock
compensation relates to the following:
Cost of revenues $ 37 $ 68 $ 214
Research and development 136 313 958
Sales and marketing 171 331 1,072
General and administrative 107 225 730
--------------- -------------- --------------------
Total amortization of deferred stock compensation $ 451 $ 937 $ 2,974
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Ceragon Reports First Quarter 2003 Results - 5
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
March 31, December 31,
2003 2002
------------------ ------------------
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,456 $ 4,688
Short-term bank deposits 10,963 10,853
Marketable securities 12,574 11,743
Trade receivables, net 3,085 4,329
Other accounts receivable and prepaid expenses 2,279 1,268
Inventories 7,987 8,054
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Total current assets 42,344 40,935
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LONG-TERM INVESTMENTS:
Long-term marketable securities 12,347 11,675
Long-term bank deposits - 4,214
Severance pay funds 1,305 1,200
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Total long-term investments 13,652 17,089
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PROPERTY AND EQUIPMENT, NET 3,264 3,616
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Total assets $ 59,260 $ 61,640
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables 5,601 5,744
Other accounts payable and accrued expenses 4,078 4,805
------------------ ------------------
Total current liabilities 9,679 10,549
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ACCRUED SEVERANCE PAY 1,962 1,825
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SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares of NIS 0.01 par value: Authorized: 40,000,000 shares
as of December 31, 2002 and March 31, 2003; issued
and outstanding: 22,578,346 and 22,670,846 as of December 31, 2002
and March 31, 2003, respectively 56 56
Additional paid-in capital 169,285 169,286
Deferred stock compensation (1,320) (1,772)
Accumulated deficit (120,402) (118,304)
------------------ ------------------
Total shareholders' equity 47,619 49,266
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Total liabilities and shareholders' equity $ 59,260 $ 61,640
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Ceragon Reports First Quarter 2003 Results - 6
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.
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Contacts:
Daphna Golden
Ceragon Networks Ltd.
+972-3-645-5513
ir@ceragon.com