EX-99 2 exhibit_a.htm EXHIBIT A exhibit_a.htm
 
Exhibit A
 
CERAGON NETWORKS REPORTS FIRST QUARTER 2010
 FINANCIAL RESULTS
 
    TEL AVIV, Israel, April 26, 2010 - Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), the provider of high-capacity, LTE/4G-ready wireless backhaul networks, today reported results for the first quarter which ended March 31, 2010.

    Revenues for the first quarter of 2010 reached an all-time high of $59.7 million, up 36% from $43.9 million for the first quarter of 2009 and up 12% from $53.4 million in the fourth quarter of 2009.

    Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2010 was $3.0 million or $0.09 per basic share and $0.08 per diluted share, compared to net income of $0.2 million in the first quarter of 2009, or $0.01 per basic and diluted share.

    On a non-GAAP basis, net income for the first quarter, excluding $971,000 of equity-based compensation expenses, was $4.0 million, or $0.12 per basic share and $0.11 per diluted share. Non-GAAP net income for the first quarter of 2009 was $1.0 million, or $0.03 per basic and diluted share (please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).

    Gross margin on a GAAP basis in the first quarter of 2010 was 34.1% of revenues. Gross margin on a non-GAAP basis was 34.2 % of revenues.

    Cash and cash investments at the end of the quarter were $98.9 million.
 
    “The year is off to a very strong start in part because we were able to recognize revenue from some turnkey projects earlier than originally expected,” said Ira Palti, President and CEO of Ceragon. “As wireless operators move forward with 4G/LTE plans in response to accelerating growth in demand for data, they remain focused on flexible solutions that accommodate the requirements of both current and future networks. As a result, the overall business outlook continues to be positive and we remain confident in our target of 30-35% revenue growth for the year, with profits growing at a higher rate than revenues.”
 
 
 
 

Supplemental revenue breakouts:

Geographical breakdown, first quarter of 2010:

EMEA:
     23 %
North America:
     21 %
Asia Pacific:
     53 %
Latin America:
     3 %

    A conference call discussing Ceragon’s results for the first quarter of 2010, will take place today, April 26 2010, at 9:00 a.m. (ET). Investors are invited to join the Company’s teleconference by calling (800) 230-1092, or international: (651) 291-0561at 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://www.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: (800) 475-6701 or International: (320) 365-3844, Access Code: 152070.

    A replay of both the call and the webcast will be available through May 26, 2010.

About Ceragon Networks Ltd.
 
    Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) is a leading provider of high capacity LTE/4G ready wireless backhaul solutions that enable cellular operators and other wireless service providers to deliver voice and data services, such as Internet browsing, music and video applications. Our wireless backhaul solutions use microwave technology to transfer large amounts of telecommunication traffic between base stations and the core of the service provider’s network. Designed to enable risk-free migration from legacy to next-generation backhaul networks, our solutions provide fiber-like connectivity for circuit-switched, or SONET/SDH, networks, next generation Ethernet/Internet Protocol, or IP-based, networks, and hybrid networks that combine circuit-switched and IP-based networks. Our solutions support all wireless access technologies, including GSM, CDMA, EV-DO, HSPA, LTE and WiMAX. These solutions allow wireless service providers to cost-effectively and seamlessly evolve their network from circuit-switched and hybrid concepts to all IP thereby meeting the increasing demands by the growing numbers of subscribers and the increasing demand for mobile data services. We also provide our solutions to businesses and public institutions that operate their own private communications networks. Our solutions are deployed by more than 200 service providers of all sizes, as well as in hundreds of private networks, in more than 130 countries. More information is available at www.ceragon.com.
 
 
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Ceragon Networks®, CeraView®, FibeAir® the FibeAir® design mark and  Native² are registered trademarks of Ceragon Network s Ltd., and Ceragon™, PolyView™, ConfigAir™, CeraMon™, EtherAir™, QuickAir™, QuickAir Partner Program™, QuickAir Partner Certification Program™, QuickAir Partner Zone™, EncryptAir™ and Microwave Fiber™ are trademarks of Ceragon Networks Ltd.

    This press release may contain statements concerning Ceragon’s future prospects that are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. These are important factors that could cause actual results to differ materially from forecasts and estimates. These risks and uncertainties, as well as others, are discussed in greater detail in Ceragon’s Annual Report on Form 20-F and Ceragon’s other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and Ceragon undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made.

Contact: Yoel Knoll
Director of Investor Relations
Ceragon Networks Ltd.
Cell (Int'l): +972 (0) 52 830 6419
Office (Int’l): +972 (0)3 766 6419
yoell@ceragon.com

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    Ceragon Reports First Quarter 2010 Results
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)

   
Three months ended
March 31,
  
   
2010
    
2009
  
             
             
Revenues
   $ 59,687     $ 43,902  
Cost of revenues
     39,311       28,831  
                 
Gross profit
     20,376       15,071  
                 
Operating expenses:
                
   Research and development
     5,273       4,774  
   Selling and marketing
     9,182       7,779  
   General and administrative
     2,780       2,575  
                 
Total operating expenses
   $ 17,235     $ 15,128  
                 
Operating income (loss)
     3,141       (57 )
Financial income, net
     234       354  
                 
Income before taxes
     3,375       297  
                 
Taxes on income
     352       82  
                 
Net Income
   $ 3,023     $ 215  
                 
                 
Basic net earnings per share
   $ 0.09     $ 0.01  
                 
Diluted net earnings per share
   $ 0.08     $ 0.01  
                 
Weighted average number of shares used in computing basic net earnings per share
      34,489,121        34,802,987  
                 
Weighted average number of shares used in computing diluted net earnings per share
      36,765,358        35,324,176  

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    Ceragon Reports First Quarter 2010 Results
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
 
   
March 31,
2010
    
December 31,
 2009
  
       
   ASSETS
            
             
CURRENT ASSETS:
            
   Cash and cash equivalents
   $ 35,347     $ 38,339  
   Short-term bank deposits
     24,343       30,183  
   Marketable securities
     15,720       16,724  
   Trade receivables, net
     58,143       68,452  
   Deferred taxes
     4,003       3,462  
   Other accounts receivable and prepaid expenses
     8,660       7,492  
   Inventories
     73,749       65,925  
                 
Total current assets
     219,965       230,577  
                 
LONG-TERM INVESTMENTS:
                
   Long-term bank deposits
     9,661       10,824  
   Long-term marketable securities
     13,867       2,250  
   Severance pay funds
     5,073       4,971  
   Deferred taxes
     8,660       8,942  
 
                
Total long-term investments
   $ 37,261     $ 26,987  
                 
PROPERTY AND EQUIPMENT, NET
     13,416       11,809  
                 
Total assets
   $ 270,642     $ 269,373  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES:
                
   Trade payables
     43,681       52,898  
   Deferred revenues
     19,869       18,548  
   Other accounts payable and accrued expenses
     12,045       9,847  
                 
Total current liabilities
   $ 75,595     $ 81,293  
                 
LONG-TERM LIABILITIES
                
   Accrued severance pay
   $ 7,329     $ 7,174  
                 
SHAREHOLDERS' EQUITY:
                
   Share capital:
                
   Ordinary shares
     94       92  
   Additional paid-in capital
     295,291       291,736  
   Treasury shares at cost
     (20,091 )     (20,091 )
   Other comprehensive income
     332       100  
   Accumulated deficits
     (87,908 )     (90,931 )
                 
Total shareholders' equity
   $ 187,718     $ 180,906  
                 
Total liabilities and shareholders' equity
   $ 270,642     $ 269,373  
 
 
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    Ceragon Reports First Quarter 2010 Results
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
 
   
Three months ended
March 31,
  
   
2010
    
2009
  
Cash flow from operating activities:
            
   Net income
   $ 3,023     $ 215  
   Adjustments to reconcile net income to net cash provided by  operating activities:
                
                 
   Depreciation
     1,040       711  
   Stock-based compensation expense
     971       789  
   Decrease in trade and other receivables, net
     9,445       13,537  
   Decrease (increase) in inventory
     (7,824 )     867  
   Decrease in trade payables and accrued liabilities
     (6,772 )     (12,563 )
   Increase in deferred revenues
     1,321       1,435  
   Increase  in deferred tax asset
     (331 )     -  
   Other adjustments
     (21 )     (138 )
Net cash provided by operating activities
   $ 852     $ 4,853  
                 
Cash flow from investing activities:
                
   Purchase of property and equipment ,net
     (2,894 )     (2,487 )
   Investment in short and long-term bank deposit
     -       (8,460 )
   Proceeds from short and long-term bank deposits
     7,073       16,960  
   Investment in held-to-maturity marketable securities
     (15,109 )     (1,500 )
   Proceeds from realized callable held-to-maturity marketable security
     -       10,000  
   Proceeds from maturities of held-to-maturity marketable securities
     4,500       454  
Net cash provided by (used in) investing activities
   $ (6,430 )   $ 14,967  
                 
Cash flow from financing activities:
                
   Proceeds from exercise of options
     2,586       -  
   Purchase of treasury shares at cost
     -       (6,422 )
Net cash provided by (used in) financing activities
   $   2,586     $ (6,422 )
                 
Increase (decrease) in cash and cash equivalents
   $ (2,992 )   $ 13,398  
                 
   Cash and cash equivalents at the beginning of the period
     38,339       28,224  
                 
Cash and cash equivalents at the end of the period
   $ 35,347     $ 41,622  

 
 
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   Ceragon Reports First Quarter 2010 Results

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)

   
Three months ended March 31,
 
  
   
2010
    
2009
  
   
GAAP (as reported)
    
Adjustments (*)
    
Non-GAAP
    
Non-GAAP
  
                         
Revenues
   $ 59,687           $ 59,687     $ 43,902  
Cost of revenues
     39,311       66       39,245       28,768  
                                 
Gross profit
     20,376               20,442       15,134  
                                 
Operating expenses:
                                
   Research and development
     5,273       177       5,096       4,614  
   Selling and marketing
     9,182       262       8,920       7,473  
   General and administrative
     2,780       466       2,314       2,315  
                                 
Total operating expenses
   $ 17,235             $ 16,330     $ 14,402  
                                 
Operating income
     3,141               4,112       732  
Financial income, net
     234               234       354  
                                 
Income before taxes
     3,375               4,346       1,086  
                                 
Taxes on income
     352               352       82  
                                 
Net income
   $ 3,023             $ 3,994     $ 1,004  
                                 
Basic net earnings per share
   $ 0.09             $ 0.12     $ 0.03  
                                 
Diluted net earnings per share
   $ 0.08             $ 0.11     $ 0.03  
                                 
Weighted average number of shares used in computing basic net earnings per share
     34,489,121               34,489,121       34,802,987  
                                 
Weighted average number of shares used in computing diluted net earnings per share
     36,765,358               36,765,358       35,324,176  
                                 
Total adjustments
             971                  
                                 
(*) Adjustments related to equity based compensation expenses according to SFAS 123 (R)
                                
 
 
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Ceragon Reports First Quarter 2010 Results

Contact: Yoel Knoll
Director of Investor Relations
Ceragon Networks Ltd.
Cell (Int'l): +972 (0) 52 830 6419
Office (Int’l): +972 (0)3 766 6419
yoell@ceragon.com
 
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