Little Falls, New Jersey, May 9, 2016 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the first quarter ended March 31, 2016.
First Quarter 2016 Highlights:
Revenues -- $59.8 million, down 36% from the first quarter of 2015, and down 21% from the fourth quarter of 2015.
Gross margin – 35.6%, compared to 25.9% in the first quarter of 2015 and 32.8% in the fourth quarter of 2015.
Operating income – $1.2 million, compared to operating income of $0.6 million in the first quarter of 2015 and operating income of $8.9 million in the fourth quarter of 2015.
Net loss – $(0.4) million or $(0.01) per diluted share. Net loss for the first quarter of 2015 was $(7.0) million, or $(0.09) per diluted share. Net income for the fourth quarter of 2015 was $5.2 million, or $0.07 per diluted share.
Non-GAAP results – gross margin was 36.3%, operating profit was $2.2 million, and net loss was $(0.1) million, or $(0.00) per diluted share. Non-GAAP results exclude adjustments of $0.3 million. For a reconciliation of GAAP to non-GAAP results, see the attached tables.
Cash and cash equivalents – $41.8 million at March 31, 2016, compared to $36.3 million at December 31, 2015.
"In the first quarter of 2016, higher gross margin on the low level of revenue enabled us to report an operating profit,” said Ira Palti, president and CEO of Ceragon. “In addition, strong cash flow results increased our cash position to $41.8 million, which exceeded debt by over $10 million, improving our financial position. Based on our recent bookings and pipeline of potential business, we believe that revenue will grow from the current level during the remainder of the year."
Supplemental revenue breakouts:
Geographical breakdown, first quarter of 2016:
Europe: 18%
Africa: 9%
North America: 15%
Latin America: 25%
India: 19%
APAC: 14%
A conference call to discuss the results will begin at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling USA: (800) 230-1059 or International: +1 (612) 332-0107, from 8:50 a.m. EDT. The call-in lines will be available on a first-come, first-serve basis.
Investors can also listen to the call live via the Internet by accessing Ceragon Networks’ website at the investors’ page, selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: USA: (800) 475-6701 or International +1 (320) 365-3844 Access Code: 390820. A replay of both the call and the webcast will be available through June 9, 2016.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless backhaul specialist. We help operators and other service providers worldwide increase operational efficiency and enhance end customers’ quality of experience with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 4G, mission-critical multimedia services and other applications at high reliability and speed. Ceragon’s unique multicore technology provides highly reliable, high-capacity 4G wireless backhaul with minimal use of spectrum, power and other resources. It enables increased productivity, as well as simple and quick network modernization. We deliver a range of professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 460 service providers, as well as hundreds of private network owners, in more than 130 countries.
-tables follow-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
|
Three months ended |
|||||||||||
|
March 31, |
|||||||||||
|
2016 |
2015 |
||||||||||
| Revenues |
$ 59,834 |
$ 93,653 |
|||||||||
| Cost of revenues |
38,543 |
69,413 |
|||||||||
| Gross profit |
21,291 |
24,240 |
|||||||||
| Operating expenses: | |||||||||||
| Research and development, net |
5,283 |
6,399 |
|||||||||
| Selling and marketing |
9,857 |
11,308 |
|||||||||
| General and administrative |
4,918 |
4,736 |
|||||||||
| Restructuring costs |
- |
1,225 |
|||||||||
| Total operating expenses |
$ 20,058 |
$ 23,668 |
|||||||||
| Operating income |
1,233 |
572 |
|||||||||
| Financial expenses, net |
918 |
6,346 |
|||||||||
| Income (loss) before taxes |
315 |
(5,774) |
|||||||||
| Taxes on income |
751 |
1,221 |
|||||||||
| Net loss |
$ 436 |
$ 6,995 |
|||||||||
| Basic and diluted net loss per share |
$ 0.01 |
$ 0.09 |
|||||||||
| Weighted average number of shares used in computing basic and diluted net loss per share |
77,655,440 |
77,145,265 |
|||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
|
March 31, 2016 |
December 31, 2015 |
|||
| ASSETS |
Unaudited |
Audited |
||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents |
$ 41,845 |
$ 36,318 |
||
| Short-term bank deposits |
33 |
- |
||
| Trade receivables, net |
82,070 |
116,683 |
||
| Other accounts receivable and prepaid expenses |
23,714 |
22,583 |
||
| Deferred taxes, net |
1,429 |
1,633 |
||
| Inventories |
49,592 |
49,690 |
||
| Total current assets |
198,683 |
226,907 |
||
| NON-CURRENT ASSETS: | ||||
| Deferred taxes, net |
160 |
189 |
||
| Severance pay funds and pension |
4,567 |
4,681 |
||
| Property and equipment, net |
27,985 |
28,906 |
||
| Intangible assets, net |
2,783 |
3,192 |
||
| Other non-current assets |
2,304 |
1,457 |
||
| Total non-current assets |
37,799 |
38,425 |
||
| Total assets |
$ 236,482 |
$ 265,332 |
||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||
| CURRENT LIABILITIES: | ||||
| Short term loans, including current maturities of long term loan |
$ 29,850 |
$ 34,922 |
||
| Trade payables |
51,239 |
71,721 |
||
| Deferred revenues |
4,234 |
8,901 |
||
| Other accounts payable and accrued expenses |
26,799 |
27,052 |
||
| Total current liabilities |
112,122 |
142,596 |
||
|
LONG-TERM LIABILITIES |
||||
| Accrued severance pay and pension |
9,272 |
9,276 |
||
| Other long term liabilities |
11,648 |
10,639 |
||
| Total long-term liabilities |
20,920 |
19,915 |
||
|
SHAREHOLDERS' EQUITY: |
||||
| Share capital: | ||||
| Ordinary shares |
214 |
214 |
||
| Additional paid-in capital |
408,585 |
408,174 |
||
| Treasury shares at cost |
(20,091) |
(20,091) |
||
| Accumulated other comprehensive loss, net of taxes |
(7,972) |
(8,616) |
||
| Accumulated deficit |
(277,296) |
(276,860) |
||
| Total shareholders' equity |
103,440 |
102,821 |
||
| Total liabilities and shareholders' equity |
$ 236,482 |
$ 265,332 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
|
Three months ended |
|||||||||||
|
March 31, |
|||||||||||
|
2016 |
2015 |
||||||||||
| Cash flow from operating activities: | |||||||||||
| Net loss |
$ (436) |
$ (6,995) |
|||||||||
| Adjustments to reconcile net loss to net cash provided by (used) in operating activities: | |||||||||||
| Depreciation and amortization |
2,308 |
3,503 |
|||||||||
| Stock-based compensation expense |
411 |
194 |
|||||||||
| Decrease in trade and other receivables, net |
34,378 |
14,869 |
|||||||||
| Decrease in inventory, net of write-off |
432 |
5,109 |
|||||||||
| Decrease in deferred tax asset, net |
233 |
730 |
|||||||||
| Decrease in trade payables and accrued liabilities |
(20,061) |
(13,719) |
|||||||||
| Decrease in deferred revenues |
(4,667) |
(5,477) |
|||||||||
| Other adjustments |
110 |
(106) |
|||||||||
| Net cash provided by (used in) operating activities |
$ 12,708 |
$ (1,892) |
|||||||||
| Cash flow from investing activities: | |||||||||||
| Purchase of property and equipment ,net |
(2,201) |
(2,042) |
|||||||||
| Proceeds from short-term bank deposits |
- |
64 |
|||||||||
| Investment in short-term bank deposits |
(33) |
- |
|||||||||
| Proceeds from sale and maturities of marketable securities |
- |
122 |
|||||||||
| Net cash used in investing activities |
$ (2,234) |
$ (1,856) |
|||||||||
| Cash flow from financing activities: | |||||||||||
| Proceeds from short-term bank loans |
- |
2,050 |
|||||||||
| Repayment of loans from financial institutions |
(5,072) |
(2,058) |
|||||||||
| Net cash used in financing activities |
$ (5,072) |
$ (8) |
|||||||||
| Translation adjustments on cash and cash equivalents |
$ 125 |
$ (397) |
|||||||||
| Increase (decrease) in cash and cash equivalents |
$ 5,527 |
$ (4,153) |
|||||||||
| Cash and cash equivalents at the beginning of the period |
36,318 |
41,423 |
|||||||||
| Cash and cash equivalents at the end of the period |
$ 41,845 |
$ 37,270 |
|||||||||
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
|
Three months ended March 31,
|
||||||||
|
2016 |
2015 |
|||||||
|
GAAP (as reported) |
Adjustments |
Non-GAAP |
Non-GAAP |
|||||
| Revenues |
$ 59,834 |
$ 59,834 |
$ 93,653 |
|||||
| Cost of revenues |
38,543 |
$1(a) 458 |
38,085 |
69,049 |
||||
| Gross profit |
21,291 |
21,749 |
24,604 |
|||||
| Operating expenses: | ||||||||
| Research and development, net |
5,283 |
$1(b) 128 |
5,155 |
6,303 |
||||
| Selling and marketing |
9,857 |
$1(c) 231 |
9,626 |
11,037 |
||||
| General and administrative |
4,918 |
$1(d) 133 |
4,785 |
4,752 |
||||
| Total operating expenses |
$ 20,058 |
$ 19,566 |
$ 22,092 |
|||||
| Operating income |
1,233 |
2,183 |
2,512 |
|||||
| Financial expenses, net |
918 |
$1(e) (907) |
1,825 |
3,372 |
||||
| Income (loss) before taxes |
315 |
358 |
(860) |
|||||
| Taxes on income |
751 |
$1(f) 246 |
505 |
487 |
||||
| Net loss |
$ 436 |
$ 147 |
$ 1,347 |
|||||
| Basic and diluted net loss per share |
$ 0.01 |
$ 0.00 |
$ 0.02 |
|||||
| Weighted average number of shares used in computing basic and diluted net loss per share |
77,655,440 |
77,655,440 |
77,145,265 |
|||||
| Total adjustments |
289 |
|||||||
(a) Cost of revenues includes $0.3 million of amortization of intangible assets, $0.1 million of changes in pre-acquisition indirect tax positions and $20 thousand of stock based compensation expenses in the three months ended March 31, 2016.
(b) Research and development expenses include stock-based compensation expenses in the three months ended March 31, 2016.
(c) Selling and marketing expenses include $0.2 million of amortization of intangible assets and $0.1 million of stock based compensation expenses in the three months ended March 31, 2016.
(d) General and administrative expenses include net stock based compensation expenses in the three months ended March 31, 2016.
(e) Financial expenses include adjustment of accounts receivable that had been written-off as part of re-measurement of certain assets denominated in or linked to the U.S. dollar in Venezuela, and were collected in April 2016.
(f) Taxes on income include non-cash tax adjustments in the three months ended March 31, 2016.
RECONCILIATION BETWEEN REPORTED AND NON-GAAP
NET LOSS
(U.S. dollars in thousands)
(Unaudited)
|
Three months ended |
|||||||||||||||
|
March 31, |
|||||||||||||||
|
2016 |
2015 |
||||||||||||||
| Reported GAAP net loss |
436 |
6,995 |
|||||||||||||
| Stock based compensation expenses |
411 |
194 |
|||||||||||||
| Amortization of intangible assets |
406 |
492 |
|||||||||||||
| Restructuring expenses |
- |
1,225 |
|||||||||||||
| Changes in pre-acquisition indirect tax positions |
133 |
30 |
|||||||||||||
| Currency devaluation in Venezuela related expenses |
(907) |
2,973 |
|||||||||||||
| Non-cash tax adjustments |
246 |
734 |
|||||||||||||
| Non-GAAP net loss |
147 |
1,347 |
|||||||||||||
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