TEL AVIV, Israel, March 30, 2009 - Ceragon Networks Ltd. (NASDAQ and
TASE: CRNT), a leading provider of high-capacity LTE ready wireless backhaul solutions,
today announced preliminary financial results for the first quarter ending March 31, 2009.
Ceragon expects revenues for the first quarter of 2009 to be in the range of $43
million to $45 million, compared with $47.2 million in the first quarter of 2008 and $56.8
million in the fourth quarter of 2008. Gross margin is expected to range from approximately
$33.5% to 34.5%. Steps taken to reduce operating expenses during the first quarter mitigated
some of the impact of lower revenues on earnings. Therefore, based on the anticipated level
of revenues during the first quarter, GAAP net income is expected to range from
approximately break even to $0.7 million, or $0.00 to $0.02 per diluted share, compared with
$4.3 million, or $0.11 per diluted share, during the first quarter of 2008.
On a non-GAAP basis, excluding approximately $800,000 of equity-based
compensation expenses, net income is expected to range from approximately $0.8 million to
$1.5 million, or $0.02 to $0.04 per diluted share, compared with $4.9 million, or $0.13 per
diluted share in the first quarter of 2008.
All of the data are subject to completion of the quarterly closing process and the
review of Ceragon’s results by its auditors. The Company had not given specific guidance for
the first quarter; however, the preliminary results are below the range of analysts’ estimates
according to First Call.
“The pace of bookings has slowed down in most regions and categories,” said Ira
Palti, President and CEO of Ceragon. “We see that sales cycles are lengthening and planned
timeline of new projects and purchasing decisions are being stretched out. On the positive
side, projects to expand high capacity wireless backhaul are moving forward, and we are
pleased to see some improvement in demand from North America, which began to show signs
of weakness during the first quarter of 2008.”
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“As the signs of lengthening sales cycles began to materialize during the quarter, we
took steps to reduce operating expenses. We are not making across the board headcount or
salary reductions, but we have identified selective additional expense reduction measures we
intend to implement over the next several weeks to lower our non-GAAP breakeven point to
$36-$37 million in revenues per quarter by the end of the second quarter.
“We continue to believe that underlying demand drivers remain intact and that the
growing need for high capacity wireless backhaul will require a resumption of more
aggressive ordering patterns, but near-term weighted deal pipeline remains low,” concluded
Mr Palti. “Our plan is to remain as flexible as possible in order to be able to respond quickly
to changes in ordering patterns in either direction.”
A conference call discussing Ceragon’s preliminary results for the first quarter of
2009, will take place today, March 30, 2009, at 9:00 a.m. (EDT). Investors can join the
Company’s teleconference by calling (800) 288-8968 or international (612) 332-0228 at 8:50
Investors are also invited to listen to the call live via the Internet by accessing
Ceragon Networks’ website at the investors’ page: https://www.ceragon.com/investors/events
selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: (800) 475-6701 or
international (320) 365-3844, access code 994270.
A replay of both the call and the webcast will be available through April 30, 2009.