LITTLE FALLS, New Jersey,
Feb. 12, 2018 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ:
CRNT), the #1 wireless backhaul specialist, today reported results
for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter 2017 Highlights:
Revenues - $86.7 million,
up 2.4% from the fourth quarter of 2016, and up 14.1% from the
third quarter of 2017.
Gross margin – 33.6%, compared to 32.5% in the fourth
quarter of 2016 and 35.1% in the third quarter of 2017.
Operating income - $7.5
million, compared to $8.5
million in the fourth quarter of 2016, and $5.7 million in the third quarter of 2017.
Net income - net income of $7.2
million, or $0.09 per diluted
share for the fourth quarter of 2017. Net income for the
fourth quarter of 2016 was $8.3
million, or $0.10 per diluted
share. Net income for the third quarter of 2017 was $3.5 million or $0.04 per diluted share.
Non-GAAP results - gross margin was 33.8%, operating
income was $6.2 million, and net
income was $4.1 million, or
$0.05 per diluted share. For
reconciliation of GAAP to non-GAAP results, see the attached
tables.
Cash and cash equivalents - $25.9
million at December 31, 2017,
compared to $36.5 million at
September 30, 2017.
Full Year 2017 Highlights:
Revenues – $332.0
million, up 13.1% from 2016.
Gross margin – 32.3%, compared to 33.8% in 2016.
Operating income – $23.1
million, compared to an operating income of $19.5 million in 2016.
Net income – $15.6 million,
or $0.19 per diluted share. Net
income for 2016 was $11.4 million, or
$ 0.15 per diluted share.
Non-GAAP results – gross margin was 32.7%, operating
income was $24.0 million, and net
income was $15.3 million, or
$0.19 per diluted share. For a
reconciliation of GAAP to non-GAAP results, see the attached
tables.
"2017 was the third consecutive year that we have achieved
significant growth in net income," said Ira
Palti, president and CEO of Ceragon. "Our technology and
product leadership, strong global presence, financial strength and
track record of performance are key differentiators that have
enabled us to win a major share of several large projects during
the year. We achieved a 36% increase in net income, and
increased our net cash to $25.9
million at the end of 2017 from $19.3
million at the end of 2016. We had particularly strong
bookings during Q4, and we believe we can continue to gradually
gain market share as operators are compelled to address complex
backhaul challenges in a comprehensive way. We expect these
challenges, which are part of the ongoing evolution to full 5G
commercial service, to drive greater demand for state-of-the-art
solutions and enable us to target progressively higher revenue
goals during the next several years."
Supplemental revenue breakouts by geography:
Fourth quarter 2017:
-
Europe:
17%
-
Africa:
3%
- North
America:
14%
- Latin
America:
20%
-
India:
34%
-
APAC:
12%
Full year 2017:
-
Europe:
14%
-
Africa: 4%
- North
America: 12%
- Latin
America:
18%
-
India:
39%
-
APAC:
13%
A conference call to discuss the results will begin at
9:00 a.m. EST. Investors are invited
to join the Company's teleconference by calling USA: (800) 288-8960 or International: +1 (612)
234-9960, from 8:50 a.m. EST. 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:
https://www.ceragon.com/about-ceragon/investor-relations/events-webcasts/,
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: 442462. A replay of
both the call and the webcast will be available through
March 12, 2018.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ: CRNT) is the world's #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.
Join the Discussion:
https://www.linkedin.com/companies/14470
https://www.facebook.com/ceragonnetworks/
https://twitter.com/Ceragon
https://www.youtube.com/user/CeragonNetworks?feature=mhum
http://blog.ceragon.com/blog
Ceragon Networks® and FibeAir® are registered trademarks of
Ceragon Networks Ltd. in the United
States and other countries. CERAGON ® is a trademark of
Ceragon Networks Ltd., registered in various countries. Other names
mentioned are owned by their respective holders.
This press release contains statements concerning Ceragon's
future prospects that are "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on the current beliefs,
expectations and assumptions of Ceragon's management. Examples of
forward-looking statements include: projections of revenues, net
income, gross margin, capital expenditures and liquidity,
competitive pressures, growth prospects, product development,
financial resources, cost savings and other financial matters. You
may identify these and other forward-looking statements by the use
of words such as "may", "plans", "anticipates", "believes",
"estimates", "targets", "expects", "intends", "potential" or the
negative of such terms, or other comparable terminology. These
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially, including risks
associated with a decline in revenues due to our focus on a single
market segment; risks relating to the concentration of Ceragon's
business in certain geographic regions such as India, Latin
America and in developing nations and the political,
economic and regulatory risks from doing business in those regions,
including potential currency restrictions; risks associated with a
change in Ceragon's gross margin as a result of changes in the
geographic mix of revenues; risks associated with the loss of a
single customer or customer group, which represents a significant
portion of Ceragon's revenues; risks associated with Ceragon's
failure to effectively compete with other wireless equipment
providers; and other risks and uncertainties detailed from time to
time in Ceragon's Annual Report on Form 20-F and Ceragon's other
filings with the Securities and Exchange Commission that represent
our views only as of the date they are made and should not be
relied upon as representing our views as of any subsequent date. We
do not assume any obligation to update any forward-looking
statements.
-tables follow-
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended December
31,
|
|
Year
ended December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Audited
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
86,679
|
|
$
84,665
|
|
$
332,033
|
|
$
293,641
|
Cost of
revenues
|
|
57,524
|
|
57,122
|
|
224,698
|
|
194,479
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
29,155
|
|
27,543
|
|
107,335
|
|
99,162
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
6,493
|
|
5,718
|
|
25,703
|
|
21,695
|
Selling and
marketing
|
|
12,337
|
|
10,334
|
|
41,656
|
|
39,515
|
General and
administrative
|
|
4,544
|
|
4,942
|
|
18,576
|
|
20,380
|
Other
income
|
|
(1,746)
|
|
(1,921)
|
|
(1,746)
|
|
(1,921)
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
21,628
|
|
19,073
|
|
84,189
|
|
79,669
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
7,527
|
|
8,470
|
|
23,146
|
|
19,493
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
|
1,155
|
|
1,494
|
|
5,889
|
|
6,303
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
6,372
|
|
6,976
|
|
17,257
|
|
13,190
|
|
|
|
|
|
|
|
|
|
Tax expenses
(benefit)
|
|
(838)
|
|
(1,357)
|
|
1,697
|
|
1,761
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
7,210
|
|
$
8,333
|
|
$
15,560
|
|
$
11,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
0.09
|
|
$
0.11
|
|
$
0.20
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share
|
|
$
0.09
|
|
$
0.10
|
|
$
0.19
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in
computing basic net income per share
|
|
78,010,416
|
|
77,759,346
|
|
77,916,912
|
|
77,702,788
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares used in
computing diluted net income per share
|
|
79,452,404
|
|
79,583,792
|
|
79,942,353
|
|
78,613,528
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(U.S. dollars in
thousands)
|
|
|
|
Year ended
December 31
|
|
|
2017
|
|
2016
|
ASSETS
|
|
Unaudited
|
|
Audited
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
25,877
|
|
$
36,338
|
Trade receivables,
net
|
|
113,719
|
|
107,395
|
Other accounts
receivable and prepaid expenses
|
|
17,052
|
|
17,076
|
Inventories
|
|
54,164
|
|
45,647
|
Total current
assets
|
|
210,812
|
|
206,456
|
NON-CURRENT
ASSETS:
|
|
|
|
|
Long-term bank
deposits
|
|
996
|
|
-
|
Deferred tax
assets
|
|
988
|
|
1,344
|
Severance pay and pension funds
|
|
5,459
|
|
4,575
|
Property and equipment, net
|
|
29,870
|
|
27,560
|
Intangible assets, net
|
|
2,199
|
|
1,544
|
Other non-current
assets
|
|
3,269
|
|
2,746
|
Total non-current
assets
|
|
42,781
|
|
37,769
|
Total assets
|
|
$
253,593
|
|
$
244,225
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Short term loan,
including current maturities of
long term bank loan
|
|
$
-
|
|
$
17,000
|
Trade
payables
|
|
75,476
|
|
68,408
|
Deferred
revenues
|
|
5,193
|
|
2,673
|
Other accounts payable
and accrued expenses
|
|
24,781
|
|
22,425
|
Total current
liabilities
|
|
105,450
|
|
110,506
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Deferred tax
liability
|
|
141
|
|
-
|
Accrued severance pay
and pension
|
|
10,085
|
|
9,198
|
Other long term
payables
|
|
4,019
|
|
8,357
|
Total long-term
liabilities
|
|
14,245
|
|
17,555
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Share
capital:
|
|
|
|
|
Ordinary shares
|
|
214
|
|
214
|
Additional paid-in
capital
|
|
410,817
|
|
409,320
|
Treasury shares at
cost
|
|
(20,091)
|
|
(20,091)
|
Other comprehensive
loss
|
|
(7,171)
|
|
(7,848)
|
Accumulated
deficits
|
|
(249,871)
|
|
(265,431)
|
Total shareholders'
equity
|
|
133,898
|
|
116,164
|
Total liabilities and
shareholders' equity
|
|
$
253,593
|
|
$
244,225
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(U.S. dollars, in
thousands)
|
(Unaudited)
|
|
|
|
Three months
ended
December
31,
|
|
Year
ended
December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
(Audited)
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
7,210
|
|
$
8,333
|
|
$
15,560
|
|
$
11,429
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,439
|
|
2,534
|
|
9,205
|
|
10,037
|
Stock-based
compensation expense
|
|
235
|
|
198
|
|
1,203
|
|
1,071
|
Decrease (increase) in
trade and other receivables,
net
|
|
15,551
|
|
4,475
|
|
(6,662)
|
|
15,798
|
Decrease (increase) in
inventory, net of write off
|
|
1,561
|
|
(1,462)
|
|
(8,592)
|
|
4,706
|
Increase (decrease) in
trade payables and accrued liabilities
|
|
(11,582)
|
|
(1,372)
|
|
3,362
|
|
(11,548)
|
Increase (decrease) in
deferred revenues
|
|
1,228
|
|
(1,753)
|
|
2,575
|
|
(6,228)
|
Decrease (increase) in
deferred tax asset, net
|
|
105
|
|
(811)
|
|
497
|
|
478
|
Other
adjustments
|
|
(130)
|
|
(140)
|
|
3
|
|
28
|
|
|
|
|
|
|
|
|
|
Net cash provided
by operating activities
|
|
$
16,617
|
|
$
10,002
|
|
$
17,151
|
|
$
25,771
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment,
net
|
|
(1,048)
|
|
(2,757)
|
|
(8,533)
|
|
(8,190)
|
Purchase
of intangible assets, net
|
|
(1,407)
|
|
-
|
|
(1,407)
|
|
-
|
Investment
in short and long-term bank deposit
|
|
(996)
|
|
-
|
|
(996)
|
|
(153)
|
Proceeds
from maturities of short and long-term bank deposits
|
|
-
|
|
-
|
|
-
|
|
153
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
$
(3,451)
|
|
$
(2,757)
|
|
$
(10,936)
|
|
$
(8,190)
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from exercise
of options
|
|
65
|
|
8
|
|
294
|
|
75
|
Repayments of bank
loans
|
|
(23,800)
|
|
(3,300)
|
|
(17,000)
|
|
(17,922)
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
$
(23,735)
|
|
$
(3,292)
|
|
$
(16,706)
|
|
$
(17,847)
|
|
|
|
|
|
|
|
|
|
Translation
adjustments on cash and cash equivalents
|
|
(24)
|
|
11
|
|
30
|
|
286
|
Increase
(decrease) in cash and cash equivalents
|
|
(10,593)
|
|
3,964
|
|
(10,461)
|
|
20
|
Cash and cash
equivalents at the beginning of the period
|
|
36,470
|
|
32,374
|
|
36,338
|
|
36,318
|
Cash and cash
equivalents at the end of the period
|
|
25,877
|
|
36,338
|
|
25,877
|
|
36,338
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands)
|
(Unaudited)
|
|
|
|
Three months
ended
December
31,
|
|
Year
ended
December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
GAAP cost
of revenues
|
|
$
57,524
|
|
$
57,122
|
|
$
224,698
|
|
$
194,479
|
Amortization of
intangible assets
|
|
(367)
|
|
(310)
|
|
(1,286)
|
|
(1,232)
|
Stock based
compensation expenses
|
|
(12)
|
|
(4)
|
|
(54)
|
|
(30)
|
Changes in
pre-acquisition indirect tax positions
|
|
237
|
|
-
|
|
119
|
|
(806)
|
Non-GAAP cost
of revenues
|
|
$
57,382
|
|
$
56,808
|
|
$
223,477
|
|
$
192,411
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
29,155
|
|
$
27,543
|
|
$
107,335
|
|
$
99,162
|
Gross profit
adjustments
|
|
142
|
|
314
|
|
1,221
|
|
2,068
|
Non-GAAP gross
profit
|
|
$
29,297
|
|
$
27,857
|
|
$
108,556
|
|
$
101,230
|
|
|
|
|
|
|
|
|
|
GAAP Research and
Development expenses
|
|
$
6,493
|
|
$
5,718
|
|
$
25,703
|
|
$
21,695
|
Stock based
compensation expenses
|
|
(73)
|
|
(17)
|
|
(229)
|
|
(151)
|
Non-GAAP Research and
Development expenses
|
|
$
6,420
|
|
$
5,701
|
|
$
25,474
|
|
$
21,544
|
|
|
|
|
|
|
|
|
|
GAAP Sales and
Marketing expenses
|
|
$
12,337
|
|
$
10,334
|
|
$
41,656
|
|
$
39,515
|
Amortization of
intangible assets
|
|
(39)
|
|
(105)
|
|
(258)
|
|
(417)
|
Stock based
compensation expenses
|
|
(46)
|
|
(54)
|
|
(292)
|
|
(369)
|
Non-GAAP Sales and
Marketing expenses
|
|
$
12,252
|
|
$
10,175
|
|
$
41,106
|
|
$
38,729
|
|
|
|
|
|
|
|
|
|
GAAP General and
Administrative expenses
|
|
$
4,544
|
|
$
4,942
|
|
$
18,576
|
|
$
20,380
|
Stock based
compensation expenses
|
|
(104)
|
|
(123)
|
|
(628)
|
|
(521)
|
Non-GAAP General and
Administrative expenses
|
|
$
4,440
|
|
$
4,819
|
|
$
17,948
|
|
$
19,859
|
|
|
|
|
|
|
|
|
|
GAAP other
income
|
|
$
(1,746)
|
|
$
(1,921)
|
|
$
(1,746)
|
|
$
(1,921)
|
Statute of limitation
on certain pre-acquisition
indirect tax liabilities
|
|
1,746
|
|
1,921
|
|
1,746
|
|
1,921
|
Non-GAAP other
income
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
GAAP financial
expenses
|
|
$
1,155
|
|
$
1,494
|
|
$
5,889
|
|
$
6,303
|
Currency devaluation in
Venezuela related expenses
|
|
-
|
|
-
|
|
-
|
|
907
|
Non-GAAP financial
expenses
|
|
$
1,155
|
|
$
1,494
|
|
$
5,889
|
|
$
7,210
|
|
|
|
|
|
|
|
|
|
GAAP taxes on
income
|
|
$
(838)
|
|
$
(1,357)
|
|
$
1,697
|
|
$
1,761
|
Changes in
pre-acquisition tax liability
|
|
-
|
|
-
|
|
-
|
|
(453)
|
Other non-cash tax
adjustments
|
|
1,802
|
|
1,786
|
|
1,177
|
|
1,109
|
Non-GAAP taxes on
income
|
|
$
964
|
|
$
429
|
|
$
2,874
|
|
$
2,417
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL RESULTS
|
(U.S. dollars in
thousands, except share and per share data)
|
(Unaudited)
|
|
|
|
Three months
ended
December
31,
|
|
Year
ended
December
31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
|
$
7,210
|
|
$
8,333
|
|
$
15,560
|
|
$
11,429
|
Amortization of
intangible assets
|
|
406
|
|
415
|
|
1,544
|
|
1,649
|
Stock based
compensation expenses
|
|
235
|
|
198
|
|
1,203
|
|
1,071
|
Changes in
pre-acquisition indirect tax positions
|
|
(237)
|
|
-
|
|
(119)
|
|
1,259
|
Currency devaluation
in Venezuela related expenses
|
|
-
|
|
-
|
|
-
|
|
(907)
|
Non-cash tax
adjustments
|
|
(1,802)
|
|
(1,786)
|
|
(1,177)
|
|
(1,109)
|
Statute of limitation
on certain pre-acquisition
indirect tax liabilities
|
|
(1,746)
|
|
(1,921)
|
|
(1,746)
|
|
(1,921)
|
Non-GAAP net
income
|
|
$
4,066
|
|
$
5,239
|
|
$
15,265
|
|
$
11,471
|
|
|
|
|
|
|
|
|
|
GAAP basic net income
per share
|
|
$
0.09
|
|
$
0.11
|
|
$
0.20
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
$
0.09
|
|
$
0.10
|
|
$
0.19
|
|
$
0.15
|
Non-GAAP basic and
diluted net income per share
|
|
$
0.05
|
|
$
0.07
|
|
$
0.19
|
|
$
0.15
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in
computing basic net income per share
|
|
78,010,416
|
|
77,759,346
|
|
77,916,912
|
|
77,702,788
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in
computing GAAP diluted net income per share
|
|
79,452,404
|
|
79,583,792
|
|
79,942,353
|
|
78,613,528
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in
computing Non-GAAP diluted net income per share
|
|
79,784,939
|
|
79,888,786
|
|
80,206,822
|
|
78,986,738
|
Investors:
|
|
|
Doron
Arazi
|
or
|
Claudia
Gatlin
|
+972 3 5431
660
|
|
212
830-9080
|
dorona@ceragon.com
|
|
claudiag@ceragon.com
|
|
|
|
Media:
|
|
|
Tanya
Solomon
|
|
|
+972 3
5431163
|
|
|
tanyas@ceragon.com
|
|
|
View original
content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-fourth-quarter-and-full-year-2017-financial-results-300596968.html
SOURCE Ceragon Networks Ltd