Revenues for the third quarter of 2011 reached a record of $116.1 million, up 86% from $62.3
million for the third quarter of 2010, and up 5% from $110.4 million in the second quarter of
Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the third
quarter of 2011 was ($6.7) million or ($0.19) per basic share and diluted share, compared to net
income of $4.6 million in the third quarter of 2010, or $0.13 per basic share and diluted share.
On a non-GAAP basis, net income for the third quarter, excluding (a) $1.7 million of equitybased
compensation expenses, and (b) $5.7 million charges related to the Nera acquisition and
integration plan, was $595,000, or $0.02 per basic share and diluted share. Non-GAAP net
income for the third quarter of 2010 was $5.5 million, or $0.16 and $0.15 per basic and diluted
share, respectively (please refer to the accompanying financial tables for reconciliation of GAAP
financial information to non-GAAP).
Gross margin on a GAAP basis in the third quarter of 2011 was 29.7% of revenues, compared to
GAAP gross margin of 21.4% in the second quarter of 2011. Gross margin on a non-GAAP
basis was 32.3% of revenues, compared to non-GAAP gross margin of 31.9% in the second
quarter of 2011.
Operating loss on a GAAP basis in the third quarter of 2011 was ($5.8) million compared to
GAAP operating loss of ($16.2) million in the second quarter of 2011. On a non-GAAP
basis operating income was $1.6 million, compared to non-GAAP operating loss of ($470,000)
in the second quarter of 2011.
Cash and cash investments at the end of the quarter were $45.9 million.
“We are pleased to report another quarter of excellent progress with the integration leading to a
sequential increase in revenues, improved gross margin and profitability,” said Ira Palti,
President and CEO of Ceragon. “Business remains good with our book-to-bill ratio for the first
nine months of 2011 above one,” continued Mr. Palti. “We expect to continue growing revenues,
probably at a slower pace than originally expected because we cannot ignore the macro
– 2 –
economic uncertainty and the issues in India affecting order patterns. Our plan to migrate
customers to lower-cost higher functionality and capacity products is proceeding smoothly, and
we continue to expect we will reach our gross margin target of the mid-30s by the end of next
year. Given the current level of visibility, we believe targeting a non-GAAP operating margin of
8%-9% by the end of 2012 is realistic.”
Supplemental revenue breakouts:
Geographical breakdown, third quarter of 2011:
• Europe: 17%
• Africa: 17%
• North America: 13%
• Latin America: 25%
• India: 12%
• APAC: 16%
A conference call will follow today, November 7, 2011, beginning at 9:00 a.m. EST. Investors
are invited to join the Company’s teleconference by calling (800) 230-1074 or international +1-
612-332 -0226 at 8:50 a.m. EST. The call-in lines will be available on a first-come, first-serve
Investors can also listen to the call live via the Internet by accessing Ceragon Networks’ website
at the investors’ page: http://ceragon.com/ir_events.asp?lang=0 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
(International) +1-320-365-3844, Access Code: 220279. A replay of both the call and the
webcast will be available through December 7, 2011.