Ceragon Updates First Quarter Revenue Guidance; Expects to Receive $17 Million Settlement in Second Quarter
April 02, 2014
Significant improvement in Q1 bookings; company chose not to ship certain order pending renegotiation of payment terms with a customer
Paramus, New Jersey, April 2, 2014 – Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 high-capacity wireless hauling specialist, today announced updated revenue guidance for the first quarter of 2014 in the range of $70 million to $73 million, below the company’s earlier guidance of $83 million to $93 million, primarily due to the company’s decision not to ship and install equipment for a certain customer until completing the renegotiation of payment terms. A secondary factor affecting Q1 revenue was a higher than expected proportion of IP-20 products in Q1 bookings. Some of the orders were received too late in the quarter to ship within the quarter because manufacturing for the new products was ramping and had not reached full productivity. Final results for the first quarter will be released on May 8, 2014. The company also announced a settlement agreement pursuant to which it expects to receive $17 million in cash during the second quarter of 2014.
“Our revised revenue expectations for the first quarter are unrelated to demand, which is improving,” said Ira Palti, President and CEO of Ceragon. “Bookings increased over 25% sequentially in Q1, to a level above the high end of our original revenue guidance. Thus, our book-to-bill ratio improved significantly, even though Q1 is typically a seasonally weaker quarter for bookings. “Meanwhile, we have been in discussions with one of our large, valued customers, and we decided not to ship and install an order we received in Q4 until we renegotiate payment terms. This is a satisfied customer that is growing rapidly and we expect to resume shipping to them once we have agreed on mutually acceptable terms.
“We are delighted to see this early strength in bookings for IP-20 products, which represented over 40% of bookings in Q1, compared to only 15% in the fourth quarter of 2013,” Palti continued. “We have been ramping production as quickly as possible to meet the demand.”
Settlement Agreement Signed
On April 1, 2014, Ceragon signed an agreement with Eltek ASA, to settle all claims, counter claims, legal proceedings, and any other contingent or potential claims regarding alleged breaches of representations and warranties contained in the purchase agreement governing Ceragon’s acquisition of Nera Networks from Eltek in January 2011. Pursuant to the settlement agreement, Ceragon expects to receive $17 million in cash during the second quarter of 2014.
Conference Call Details
A conference call discussing these developments will take place today beginning at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling USA: (800) 230-1074 or International: +1 (612) 288-0337 from 08:50 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: 323148. A replay of both the call and the webcast will be available through May 2, 2014.
GK Public Relations
Phone: (914) 768-4219
Ceragon Networks Ltd.
Phone: (201) 853-0271