Paramus, New Jersey, October 30, 2014 – Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 high-capacity wireless hauling specialist, today reported results for the third quarter which ended September 30, 2014.
Revenues for the third quarter of 2014 reached $99.0 million, up 8% from $92.1 million for the third quarter of 2013, and up 10% from $90.4 million in the second quarter of 2014.
Gross margin in accordance with US Generally Accepted Accounting Principles (GAAP) in the third quarter of 2014 was 25.6% of revenues, compared to 30.9% of revenues in the third quarter of 2013, and compared to 26.3% of revenues in the second quarter of 2014. Gross margin on a non-GAAP basis was 25.7% of revenues in the third quarter of 2014, compared to 31.9 % of revenues in the third quarter of 2013, and compared to 27.0 % of revenues in the second quarter of 2014.
Operating loss on a GAAP basis in the third quarter of 2014 was $(0.8) million, compared to an operating loss of $(4.1) million in the third quarter of 2013, and compared to an operating income of $11.8 million in the second quarter of 2014. On a non-GAAP basis, the operating profit was $0.1million in the third quarter of 2014, compared to an operating loss of $(2.2) million in the third quarter of 2013, and compared to an operating loss of $(2.6) million in the second quarter of 2014.
Net loss on a GAAP basis for the third quarter of 2014 was $(5.6) million or $(0.08) per basic share and diluted share. Net loss for the third quarter of 2013 was $(10.4) million, or $(0.28) per basic share and diluted share. Net income for the second quarter of 2014 was $8.0 million or $0.15 per basic share and diluted share, primarily due to $16.8 million of non-recurring other income resulting from a settlement agreement with Eltek ASA.
On a non-GAAP basis, net loss for the third quarter of 2014 was $(3.6) million, or $(0.05) per basic share and diluted share, compared to a non-GAAP net loss for the third quarter of 2013 of $(4.5) million, or $(0.12) per basic share and diluted share. The non-GAAP net loss for the second quarter of 2014 was $(5.0) million or $(0.10) per basic share and diluted share.
For reconciliations of GAAP to non-GAAP results, see the attached tables.
“The pickup in revenues and the continued acceleration in bookings during the third quarter were mainly a result of extremely strong demand from India,” said Ira Palti, president and CEO of Ceragon. “We approached breakeven on an operating basis and reported a small non-GAAP operating profit, despite a less favorable geographic revenue mix putting pressure on our gross margin. With improving overall demand and the excellent reception our IP-20 platform is receiving in the market, our primary focus going forward will be on achieving sustainable profitability and positive cash flow.”
Supplemental geographical breakdown of revenue, third quarter of 2014:
- Europe: 17%
- Africa: 17%
- North America: 7%
- Latin America: 24%
- India: 26%
- APAC: 9%
A conference call will follow beginning at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling (USA) (800) 230-1093 or international +1 (612) 234-9959 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: http://ceragon.com/about-us/ceragon/investor-relations selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: Telephone: USA: (800) 475-6701; International: +1 (320) 365-3844; Access Code: 338241. A replay of both the call and the webcast will be available through November 30, 2014.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Ceragon uses non-GAAP measures of its financial results. Ceragon’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Ceragon’s ongoing core operations and prospects for the future. Historically, Ceragon has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company “through the eyes of management,” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in the tables attached to this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.