Global / North America

Press Release

CERAGON NETWORKS REPORTS FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS

February 13, 2014

PARAMUS, N.J., Feb. 13, 2014 – Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 high-capacity wireless hauling specialist today reported results for the fourth quarter and full year of 2013 which ended December 31, 2013.

Revenues for the fourth quarter of 2013 were $89.5 million, down 16% from $106.8 million for the fourth quarter of 2012, and down 3% from $92.1 million in the third quarter of 2013.

Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the fourth quarter of 2013 was $(15.4) million or $(0.35) per basic share and diluted share, compared to net loss of $(8.4) million in the fourth quarter of 2012, or $(0.23) per basic share and diluted share.

On a non-GAAP basis, net loss for the fourth quarter of 2013 was $(4.1) million, or $(0.09) per basic and diluted share, excluding (a) $0.9 million of equity-based compensation expenses, (b) $0.6 million amortization of intangible assets, (c) $12.6 million restructuring and other expenses associated with the Q4 2013 restructuring, (d) $7.5 million primarily related to the expiration of certain pre-acquisition indirect tax exposures, (e) $1.3 million non-recurring adjustment of pension liabilities, and (f) $3.3 million of financial expenses related to actions taken in order to expatriate cash from Argentina. Non-GAAP net income for the fourth quarter of 2012 was $0.4 million, or $0.01 per basic share and diluted share, with 16% fewer weighted average shares outstanding (Please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP.)

Revenues for the full year of 2013 were $361.8 million, down 19% from $446.7 million in 2012. Net loss on a GAAP basis for 2013 was $(47.5) million or $(1.23) per basic share and diluted share. Net loss for the year 2012 was $(23.4) million or $(0.64) per basic share and diluted share.

On a non-GAAP basis, net loss for 2013 was $(20.0) million or $(0.52) per basic share and diluted share, excluding (a) $3.7 million of equity-based compensation expenses, (b) $2.5 million amortization of intangible assets, (c) $0.5 million of inventory step-up, (d) $15.4 million restructuring and other expenses associated with Q4 2013 restructuring, (e) $6.4 million related to the expiration of certain pre-acquisition indirect tax exposures, net of $1.3 million of interest accretion during the year, (f) $1.3 million non-recurring adjustment of pension liabilities, (g) $3.1 million non-recurring currency devaluation in Venezuela, (h) $3.3 million financial expenses related to actions taken in order to expatriate cash from Argentina, and (i) $4.0 million non-recurring adjustment of valuation allowance on tax assets. Net income for the year 2012 was $0.1 million, or $0.00 per basic share and diluted share.

Gross margin on a GAAP basis in the fourth quarter of 2013 was 31.0% of revenues. Gross margin on a non-GAAP basis in the fourth quarter was 32.1% of revenues.

Operating loss on a GAAP basis in the fourth quarter of 2013 was ($9.6) million. On a non-GAAP basis operating loss in the fourth quarter of 2013 was $(1.6) million.

Cash and cash investments at the end of the quarter were $52.3 million.

“We ended 2013 as we expected, with Latin America continuing to be the strongest region,” said Ira Palti, President and CEO of Ceragon. “The restructuring in Q4 was completed swiftly, the organization is operating efficiently, and the balance of our new product portfolio will be shipping this quarter as planned.

“The excellent feedback we are receiving from customers is validating our strategy, our technology and our time-to-market leadership. With the restructuring behind us, and our new products garnering attention from existing customers as well as opening doors with important new ones, we are entering 2014 well-positioned to benefit as overall demand improves, which we expect to begin gradually in the second half of the year,” concluded Mr. Palti.

Supplemental quarterly revenue breakouts:

Geographical breakdown, fourth quarter of 2013:

  • Europe: 20%
  • Africa: 11%
  • North America: 10%
  • Latin America: 40%
  • India: 8%
  • APAC: 11%

Geographical breakdown, full year 2013:

  • Europe: 18%
  • Africa: 20%
  • North America: 9%
  • Latin America: 34%
  • India: 8%
  • APAC: 11%

A conference call to discuss the results will begin at 9:00 a.m. ET. Investors are invited to join the Company’s teleconference by calling USA: (800) 230-1085 or International: +1 (612) 332-0107, from 8:50 a.m. ET. 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: 314921. A replay of both the call and the webcast will be available through March 13, 2014.

Media Contact

Matthew Krieger

GK Public Relations

Phone: (914) 768-4219

Email: matthew@gkpr.com

Tanya Solomon

Ceragon Networks Ltd.

Phone: (201) 853-0271

Email: tanyas@ceragon.com

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