EX-99 2 exhibit_a.htm EXHIBIT A exhibit_a.htm
Exhibit A
 
 
Press Release
Ceragon Reports First Quarter 2013 – May 6 2013

CERAGON NETWORKS REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS
 
Paramus, New Jersey, May 6, 2013 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the first quarter which ended March 31, 2013.
 
Revenues for the first quarter of 2013 reached $90.1 million, down 18% from $110.0 million for the first quarter of 2012, and down 16% from $106.8 million in the fourth quarter of 2012.
 
Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2013 was $(14.1) million or $(0.38) per basic share and diluted share, compared to net loss of $(7.4) million in the first quarter of 2012, or $(0.20) per basic share and diluted share.
 
On a non-GAAP basis, excluding (a) $1.1 million of stock-based compensation expenses, (b) $0.7 million amortization of intangible assets, (c) $0.4 million inventory step up related to the Nera acquisition, (d) $2.8 million restructuring and other charges related to reduction in workforce (e) $0.3 million of changes in pre-acquisition indirect tax positions and (f) $3.1 million finance expenses related to a non-recurring currency devaluation in Venezuela, net loss for the first quarter was $(5.7) million, or $(0.16) per basic share and diluted share. Non-GAAP net loss for the first quarter of 2012 was $(2.2) million, or $(0.06) per basic share and diluted share (please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP).
 
Gross margin on a GAAP basis in the first quarter of 2013 was 30.5% of revenues. Gross margin on a non-GAAP basis was 31.9% of revenues.
 
Operating loss on a GAAP basis in the first quarter of 2013 was $(8.7) million. On a non-GAAP basis operating loss was $(3.4) million.
 
Cash and cash investments at the end of the quarter were $51.6 million.
 
 
 
 
 
“Our financial results for the first quarter of 2013 reflect longer sales cycles,” said Ira Palti, President and CEO of Ceragon. “The outlook remains the same as we indicated on April 8th. We are not seeing carriers cancelling or reducing the scope of their planned projects, and the delays in closing deals relate mainly to operator hesitation during a period of reevaluating business models with a network architecture transition on the horizon.
 
“Meanwhile, the response to our new product line from initial evaluations is very encouraging, and we expect to be able to capitalize on our leadership position beginning next year when the transition to new architectures expands beyond early adopters.”
 
Supplemental revenue breakouts:
 
Geographical breakdown, first quarter of 2013:
 
·
Europe:
19%
  
·
Africa:
13%
  
·
North America:
9%
  
·
Latin America:
38%
  
·
India:
8%
  
·
APAC:
13%
  
 
A conference call will follow today, May 6, 2013, beginning at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling (800) 230-1059, or international +1(612) 234-9960 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://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: USA - (800) 475-6701, or international- +1 (320) 365-3844, Access Code: 287910A replay of both the call and the webcast will be available through June 6, 2013.
 
 
 
 
 
About Ceragon Networks Ltd.
 
Ceragon Networks Ltd.(NASDAQ: CRNT) is the #1 wireless backhaul specialist.  We provide innovative, flexible and cost-effective wireless backhaul and fronthaul solutions that enable mobile operators and other wired/wireless service providers to deliver 2G/3G, 4G/LTE and other broadband services to their subscribers.  Ceragon’s high-capacity, solutions use microwave technology to transfer voice and data traffic while maximizing bandwidth efficiency, to deliver more capacity over longer distances under any deployment scenario. Based on our extensive global experience, Ceragon delivers turnkey solutions that support service provider profitability at every stage of the network lifecycle enabling faster time to revenue, cost-effective operation and simple migration to all-IP networks.  As the demand for data pushes the need for ever-increasing capacity, Ceragon is committed to serve the market with unmatched technology and innovation, ensuring effective solutions for the evolving needs of the marketplace. Our solutions are deployed by more than 430 service providers in over 130 countries.
 
Ceragon Networks® is a registered trademark 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.
 
Company and Investor Contact:
Yoel Knoll
Ceragon Networks Ltd.
Tel. +1 (201)-853-0228
yoelk@ceragon.com
Media Contact:
Abigail Levy-Gurwitz
Ceragon Networks Ltd.
Tel: +1-(201)-853-0271
abigaill@ceragon.com
Media Contact:
Karen Quatromoni
Rainier Communications
Tel. 508-475-0025 x150
kquatromoni@rainierco.com
 
 
Join the Discussion:        
  
 
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. Some of the factors that could significantly impact the forward-looking statements in this press release include the risk of significant expenses in connection with potential contingent tax liability associated with Nera’s prior operations or facilities, risks associated with unexpected changes in customer demand, risks associated with increased working capital needs, and other risks and uncertainties, which 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. Ceragon’s public filings are available from the Securities and Exchange Commission’s website at www.sec.gov  or may be obtained on Ceragon’s website at www.ceragon.com
 
 
 
 
 
Ceragon Reports First Quarter 2013 Results
  
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)

   
Three months ended
  
   
March 31,
  
   
2013
    
2012
  
             
Revenues
   $ 90,097     $ 110,046  
Cost of revenues
     62,637       77,237  
                 
Gross profit
     27,460       32,809  
                 
Operating expenses:
                
Research and development, net
     11,906       12,155  
Selling and marketing
     17,533       19,634  
General and administrative
     6,715       7,215  
                 
Total operating expenses
   $ 36,154     $ 39,004  
                 
Operating loss
     8,694       6,195  
Financial expenses, net
     4,629       906  
                 
Loss before taxes
     13,323       7,101  
                 
Taxes on income
     818       290  
                 
Net loss
   $ 14,141     $ 7,391  
                 
Basic and diluted net loss per share
   $ 0.38     $ 0.20  
                 
Weighted average number of shares used in computing basic and diluted net loss per share
     36,755,603       36,346,482  

 
 
 
 
Ceragon Reports First Quarter 2013 Results
  
  
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 (Unaudited)
 
   
March 31,
2013
    
December 31,
2012
  
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
   $ 46,805     $ 47,099  
Short-term bank deposits
     639       422  
Trade receivables, net
     128,655       149,120  
Deferred taxes, net
     7,382       8,589  
Other accounts receivable and prepaid expenses
     36,812       38,743  
Inventories
     62,660       65,554  
Total current assets
     282,953       309,527  
                 
NON-CURRENT ASSETS:
                
Marketable securities
     4,111       4,068  
   Deferred taxes, net
     10,083       9,140  
   Severance pay funds and pension
     7,226       7,163  
   Property and equipment, net
     33,826       33,642  
   Intangible assets, net
     9,155       9,809  
   Goodwill
     15,318       15,283  
   Other non-current assets
     5,556       4,964  
Total non-current assets
     85,275       84,069  
                 
Total assets
   $ 368,228     $ 393,596  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES:
                
Short term loans, including current maturities of long term loan
   $ 26,232     $ 25,232  
Trade payables
     81,615       102,079  
Deferred revenues
     15,467       16,719  
Other accounts payable and accrued expenses
     46,415       36,090  
Total current liabilities
     169,729       180,120  
                 
LONG-TERM LIABILITIES
                
Long term bank loan, net of current maturities
     16,478       18,536  
Accrued severance pay and pension
     12,208       12,311  
Other long term liabilities
     37,595       38,920  
      66,281       69,767  
SHAREHOLDERS' EQUITY:
                
Share capital:
                
    Ordinary shares
     98       98  
Additional paid-in capital
     320,318       318,106  
Treasury shares at cost
     (20,091 )     (20,091 )
Accumulated other comprehensive loss, net of taxes
     (52 )     (490 )
Accumulated deficit
     (168,055 )     (153,914 )
                 
Total shareholders' equity
     132,218       143,709  
                 
Total liabilities and shareholders' equity
   $ 368,228     $ 393,596  

 
 
 
 
Ceragon Reports First Quarter 2013 Results
  
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
 
   
Three months ended
  
   
March 31,
  
   
2013
    
2012
  
Cash flow from operating activities:
            
Net loss
   $ (14,141 )   $ (7,391 )
Adjustments to reconcile net loss to net cash provided by operating activities:
                
                 
Depreciation and amortization
     4,038       3,771  
Stock-based compensation expense
     1,075       1,585  
Decrease (increase) in trade and other receivables, net
     23,652       (2,104 )
Decrease in inventory, net of write-off
     2,863       17,043  
Increase (decrease) in trade payables and accrued liabilities
     (13,425 )     1,774  
Decrease in deferred revenues
     (1,252 )     (9,172 )
Decrease (increase) in deferred tax asset, net
     150       (377 )
Other adjustments
     (101 )     (104 )
Net cash provided by operating activities
   $ 2,859     $ 5,025  
                 
Cash flow from investing activities:
                
Purchase of property and equipment ,net
     (2,895 )     (3,303 )
Investment in short and long-term bank deposit
     (217 )     (1,266 )
Proceeds from short and long-term bank deposits
     -       2,250  
Proceeds from sale and maturities of marketable securities
     -       9,717  
Net cash provided by (used in) investing activities
   $ (3,112 )   $ 7,398  
                 
Cash flow from financing activities:
                
Proceeds from exercise of options
     1,137       213  
Proceeds from short-term bank loan
     3,000       -  
Repayment of loans from financial institutions
     (4,058 )     (2,058 )
Net cash provided by (used in) financing activities
   $ 79     $ (1,845 )
                 
Translation adjustments on cash and cash equivalents
   $ (120 )   $ (151 )
                 
Increase (decrease) in cash and cash equivalents
   $ (294 )   $ 10,427  
                 
Cash and cash equivalents at the beginning of the period
     47,099       28,991  
                 
Cash and cash equivalents at the end of the period
   $ 46,805     $ 39,418  

 
 
 
 
Ceragon Reports First Quarter 2013 Results
  
 
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
 
   
Three months ended March 31,
  
   
2013
    
2012
  
   
GAAP (as reported)
  
Adjustments
  
Non-GAAP
    
Non-GAAP
  
                     
Revenues
   $ 90,097       $ 90,097     $ 110,046  
Cost of revenues
     62,637  
(a) 1,295
     61,342       74,940  
Gross profit
     27,460         28,755       35,106  
                           
Operating expenses:
                          
Research and development, net
     11,906  
(b) 1,523
     10,383       11,731  
Selling and marketing
     17,533  
(c) 1,423
     16,110       18,019  
General and administrative
     6,715  
(d) 1,067
     5,648       6,363  
                           
Total operating expenses
   $ 36,154       $ 32,141     $ 36,113  
                           
Operating loss
     8,694         3,386       1,007  
Financial expenses, net
     4,629  
(e) 3,133
     1,496       906  
                           
Loss before taxes
     13,323         4,882       1,913  
                           
Taxes on income
     818         818       290  
                           
Net loss
   $ 14,141       $ 5,700     $ 2,203  
                           
Basic and diluted net loss per share
   $ 0.38       $ 0.16     $ 0.06  
                           
Weighted average number of shares used in computing basic and diluted net loss  per share
     36,755,603         36,755,603       36,346,482  
                           
Total adjustments
        
8,441
                
 
(a)
Cost of revenues includes $0.3 million of amortization of intangible assets, $0.4 million of inventory step-up, $0.3 million of changes in pre-acquisition indirect tax positions, $0.1 million of stock based compensation expenses and $0.2 million of restructuring and other charges related to reduction in workforce in the three months ended March 31, 2013.
(b)
Research and development expenses include $1.2 million of restructuring and other charges related to reduction in workforce and $0.3 million of stock based compensation expenses in the three months ended March 31, 2013.
(c)
Selling and marketing expenses includes $0.3 million of amortization of intangible assets, $0.7 million of restructuring and other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013.
(d)
General and administrative expenses includes $0.7 million of restructuring other charges related to reduction in workforce and $0.4 million of stock based compensation expenses in the three months ended March 31, 2013.
(e)
Financial expenses includes $3.1 million non-recurring currency devaluation in Venezuela in the three months ended March 31, 2013

 
 
 
 
Ceragon Reports First Quarter 2013 Results
  
 
RECONCILIATION BETWEEN REPORTED AND NON-GAAP
NET LOSS
(U.S. dollars in thousands)
(Unaudited)

   
Three months ended
  
   
March 31, 2013
  
       
Reported GAAP net loss
     14,141  
         
Stock based compensation expenses
     1,075  
Amortization of intangible assets
     666  
Inventory step-up
     459  
Restructuring and other charges related to reduction in workforce
     2,844  
Changes in pre-acquisition indirect tax positions
     264  
Financial expenses related to non-recurring currency devaluation in Venezuela
     3,133  
         
Non-GAAP net loss
     5,700  
 
###
 
Contact: Yoel Knoll
VP of Investor Relations
Ceragon Networks Ltd.
US. +1 (201) 853.0228
Cell (Int'l): +972 (0) 52 830 6419
Office (Int’l): +972 (0)3 766 6419
yoelk@ceragon.com