exhibit_a.htm

Exhibit A

Ceragon Networks Reports Second Quarter 2015 Financial Results

August 13, 2015

CERAGON NETWORKS REPORTS SECOND QUARTER 2015

FINANCIAL RESULTS

Company returns to profitability and generates positive cash flow

Paramus, New Jersey, August 13, 2015 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2015.

Second Quarter 2015 Highlights:

Revenues - $94.8 million, up 4.8% from the second quarter of 2014, and up 1.2% from the first quarter of 2015.

Gross margin - 28.2%, compared to 26.3% in the second quarter of 2014 and 25.9% in the first quarter of 2015.

Operating income - $5.9 million, compared to $11.8 million in the second quarter of 2014, which included $16.8 million of non-recurring other income, and compared to $0.6 million in the first quarter of 2015.

Net income (loss) – Net income of $1.3 million, or $0.02 per diluted share for the second quarter of 2015. Net income for the second quarter of 2014, including non-recurring other income, was $8.0 million, or $0.15 per diluted share. Net loss for the first quarter of 2015 was $(7.0) million or $(0.09) per diluted share.

Non-GAAP results- gross margin was 28.6%, operating profit was $6.7 million, and net income was $3.0 million, or $0.04 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached table.

Cash and cash equivalents- $39.5 million at June 30, 2015, compared to $37.3 million at March 31, 2015.

“We reached a very important milestone in the second quarter by clearly restoring our financial stability with solid profitability and positive cash flow,” said Ira Palti, president and CEO of Ceragon. “More important, we are much more confident that we can continue the trend of profit improvement.

“Reaching our initial financial targets more quickly than expected demonstrates the effectiveness of our strategic initiatives aimed at capitalizing on our best-of-breed technology and global reach by focusing on high-value opportunities worldwide with telecom carriers and private network operators seeking best-of-breed solutions. Now, as we continue to refine our strategy and improve our execution, we are setting new, higher profit goals for the company.”

Supplemental geographical breakdown of revenue for the second quarter of 2015:

Europe:

12%

Africa:

North America:

18%

Latin America:

22%

India:

30%

APAC:

10%

A conference call to discuss the results will begin at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling USA: (800) 230-1059 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://www.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: USA: (800) 475-6701 or International +1 (320) 365-3844 Access Code: 363874. A replay of both the call and the webcast will be available through September 13, 2015.

About Ceragon Networks Ltd.

Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless backhaul specialist. We provide innovative, flexible and cost-effective wireless backhaul solutions that enable mobile operators and other service providers to deliver 4G/LTE, 3G/2G, and other wireless broadband services to their subscribers with high quality of experience. Our solution are deployed by public utilities, government and defense organizations for delivering mission critical multimedia and other applications at high reliability and speed. Ceragon’s high-capacity solutions use microwave technology to transfer multimedia, 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 modernization to all-IP networks. As the demand for multimedia services 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.

Join the Discussion

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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” under the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include: projections of capital expenditures and liquidity, competitive pressures, revenues, growth prospects, product development, financial resources, restructuring costs, cost savings and other financial matters. You can identify these and other forward-looking statements by the use of words such as “may,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “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 the risk that Ceragon will not achieve the benefits it expects from its expense reduction and profit enhancement programs; the risk that Ceragon’s expectations regarding future revenues and profitability will not materialize; the risk that Ceragon will not comply with the financial or other covenants in its agreements with its lenders; risks associated with doing business in Latin America, including currency export controls and recent economic concerns; risks relating to the concentration of our business in the Asia Pacific region and in developing nations; the risk of significant expenses in connection with potential contingent tax liability associated with Nera’s prior operations or facilities; 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, and 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.

Investors:

Doron Arazi or	Claudia Gatlin
+972 3 5431 660	+1 212 830-9080
dorona@ceragon.com	claudiag@ceragon.com

Media:

Tanya Solomon

+972 3 5431163

tanyas@ceragon.com

-tables follow-

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Ceragon Reports Second Quarter 2015 Results

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015			2014


Revenues	$	94,772	$	90,420	$	188,425		$	160,935
Cost of revenues		68,078		66,607		137,491			121,543

Gross profit		26,694		23,813		50,934			39,392

Operating expenses:
Research and development		5,770		8,454		12,169			18,893
Selling and marketing		9,481		14,655		20,789			30,075
General and administrative		5,525		5,720		10,261			11,626
Restructuring costs		-		-		1,225			936
Other income		-		16,800		-			16,800

Total operating expenses	$	20,776	$	12,029	$	44,444		$	44,730

Operating income (loss)		5,918		11,784		6,490			(5,338	)

Financial expenses, net		3,161		2,175		9,507			10,339

Income (loss) before taxes		2,757		9,609		(3,017	)		(15,677	)

Taxes on income		1,426		1,611		2,647			3,288

Net income (loss)	$	1,331	$	7,998	$	(5,664	)	$	(18,965	)

Basic net income (loss) per share	$	0.02	$	0.15	$	(0.07	)	$	(0.36	)

Diluted net income (loss) per share	$	0.02	$	0.15	$	(0.07	)	$	(0.36	)

Weighted average number of shares used in computing basic net income (loss) per share		77,170,030		52,457,168		77,158,982			52,457,168
Weighted average number of shares used in computing diluted net income (loss) per share		77,243,249		52,861,134		77,158,982			52,457,168

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Ceragon Reports Second Quarter 2015 Results

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

	June 30, 2015			December 31, 2014
ASSETS	Unaudited			Audited

CURRENT ASSETS:
Cash and cash equivalents	$	39,535		$	41,423
Short-term bank deposits		353			413
Marketable securities		-			535
Trade receivables, net		138,110			162,626
Deferred taxes, net		25,186			22,898
Other accounts receivable and prepaid expenses		2,085			3,522
Inventories		51,337			61,830
Total current assets		256,606			293,247

NON-CURRENT ASSETS:
Deferred tax assets, net		103			239
Severance pay and pension fund		5,327			5,669
Property and equipment, net		30,646			33,138
Intangible assets, net		4,300			5,070
Other non-current assets		3,681			4,510
Total non-current assets		44,057			48,626
Total assets	$	300,663		$	341,873

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Short term loan, including current maturities of long term loan	$	50,988		$	48,832
Trade payables		81,491			101,752
Deferred revenues		13,239			17,667
Other accounts payable and accrued expenses		31,291			37,248
Total current liabilities		177,009			205,499

LONG-TERM LIABILITIES:
Long term loan, net of current maturities		-			2,072
Accrued severance pay and pension		10,589			11,452
Other long term payables		16,261			18,298
Total long-term liabilities		26,850			31,822

SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares		212			212
Additional paid-in capital		406,986			406,413
Treasury shares at cost		(20,091	)		(20,091	)
Other comprehensive loss		(6,768	)		(4,111	)
Accumulated deficits		(283,535	)		(277,871	)

Total shareholders' equity		96,804			104,552

Total liabilities and shareholders' equity	$	300,663		$	341,873

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Ceragon Reports Second Quarter 2015 Results

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Cash flow from operating activities:
Net income (loss)	$	1,331		$	7,998		$	(5,664	)	$	(18,965	)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization		2,719			3,530			6,222			6,908
Stock-based compensation expense		378			1,076			572			2,123
Decrease (increase) in trade and other receivables, net		4,487			(15,800	)		19,356			(13,906	)
Decrease in inventory, net of write off		4,539			1,420			9,648			3,029
Decrease in deferred tax asset, net		723			1,327			1,453			2,644
Increase (decrease) in trade payables and accrued liabilities		(11,612	)		6,139			(25,331	)		(8,919	)
Increase (decrease) in deferred revenues		1,049			3,946			(4,428	)		1,047
Other adjustments		(83	)		(570	)		(189	)		271
Net cash provided by (used in) operating activities	$	3,531		$	9,066		$	1,639		$	(25,768	)

Cash flow from investing activities:
Purchase of property and equipment		(1,431	)		(3,328	)		(3,473	)		(6,178	)
Investment in short-term bank deposits		(4	)		-			(4	)		-
Proceeds from short-term bank deposits		-			8			64			58
Proceeds from sale and maturities of marketable securities, net		-			-			122			5,161
Net cash used in investing activities	$	(1,435	)	$	(3,320	)	$	(3,291	)	$	(959	)

Cash flow from financing activities:
Proceeds from bank loans		2,150			2,080			4,200			20,190
Repayment of bank loans		(2,058	)		(2,058	)		(4,116	)		(4,116	)
Net cash provided by financing activities	$	92		$	22		$	84		$	16,074

Translation adjustments on cash and cash equivalents	$	77		$	52		$	(320	)	$	121
Increase (decrease) in cash and cash equivalents	$	2,265		$	5,820		$	(1,888	)	$	(10,532	)
Cash and cash equivalents at the beginning of the period		37,270			26,055			41,423			42,407
Cash and cash equivalents at the end of the period	$	39,535		$	31,875		$	39,535		$	31,875

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Ceragon Reports Second Quarter 2015 Results

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)

	Three months ended June 30,
	2015					2014
	GAAP (as reported)		Adjustments	Non-GAAP		Non-GAAP

Revenues	$	94,772		$	94,772	$	90,420
Cost of revenues		68,078	(a) 403		67,675		66,045

Gross profit		26,694			27,097		24,375

Operating expenses:
Research and development		5,770	(b) 245		5,525		7,689
Selling and marketing		9,481	(c) 150		9,331		13,989
General and administrative		5,525	(d) 24		5,501		5,283

Total operating expenses		20,776		$	20,357	$	26,961

Operating income (loss)		5,918			6,740		(2,586	)
Financial expenses, net		3,161			3,161		2,175

Income (loss) before taxes		2,757			3,579		(4,761	)

Taxes on income		1,426	(e) 856		570		260

Net income (loss)	$	1,331		$	3,009	$	(5,021	)

Basic net earnings (loss) per share	$	0.02		$	0.04	$	(0.10	)

Diluted net earnings (loss) per share	$	0.02		$	0.04	$	(0.10	)

Weighted average number of shares used in computing basic net earnings (loss) per share		77,170,030			77,170,030		52,457,168

Weighted average number of shares used in computing diluted net earnings (loss) per share		77,243,249			77,811,594		52,457,168
Total adjustments			1,678

(a)	Cost of revenues includes $0.3 million of amortization of intangible assets, $0.1 million of changes in pre-acquisition indirect tax positions and $20 thousand of stock based compensation income in the three months ended June 30, 2015.

(b)	Research and development expenses include $0.2 million of stock-based compensation expenses in the three months ended June 30, 2015.

(c)	Selling and marketing expenses include $20 thousand of amortization of intangible assets and $0.1 million of stock based compensation expenses in the three months ended June 30, 2015.

(d)	General and administrative expenses include stock based compensation expenses in the three months ended June 30, 2015.

(e)	Taxes on income include non-cash tax adjustments in the three months ended June 30, 2015.

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Ceragon Reports Second Quarter 2015 Results

RECONCILIATION OF NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)

	Six months ended June 30,
	2015							2014
	GAAP (as reported)			Adjustments		Non-GAAP		Non-GAAP

Revenues	$	188,425				$	188,425	$	160,935
Cost of revenues		137,491		(a) 767			136,724		120,115
Gross profit		50,934					51,701		40,820

Operating expenses:
Research and development		12,169		(b) 341			11,828		15,542
Selling and marketing		20,789		(c) 422			20,367		28,394
General and administrative		10,261		(d) 8			10,253		10,305
Restructuring costs		1,225			1,225		-		-

Total operating expenses	$	44,444				$	42,448	$	54,241

Operating income (loss)		6,490					9,253		(13,421	)
Financial expenses, net		9,507		(e) 2,973			6,534		4,029

Income (loss) before taxes		(3,017	)				2,719		(17,450	)

Taxes on income		2,647		(f) 1,590			1,057		447

Net income (loss)	$	(5,664	)			$	1,662	$	(17,897	)

Basic net income (loss) per share	$	(0.07	)			$	0.02	$	(0.34	)

Diluted net income (loss) per share	$	(0.07	)			$	0.02	$	(0.34	)
Weighted average number of shares used in computing basic net earnings (loss) per share		77,158,982					77,158,982		52,457,168

Weighted average number of shares used in computing diluted net earnings (loss) per share		77,158,982					77,796,494		52,457,168

Total adjustments					7,326

(a)	Cost of revenues includes $0.6 million of amortization of intangible assets, $0.1 million of changes in pre-acquisition indirect tax positions and $10 thousand of stock based compensation expenses in the six months ended June 30, 2015.

(b)	Research and development expenses include $0.3 million of stock-based compensation expenses in the six months ended June 30, 2015.

(c)	Selling and marketing expenses include $0.2 million of amortization of intangible assets and $0.2 million of stock based compensation expenses in the six months ended June 30, 2015.

(d)	General and administrative expenses include stock based compensation expenses in the six months ended June 30, 2015.

(e)	Financial expenses include the effect of re-measurement of certain assets denominated in or linked to the U.S. dollar in Venezuela, due to restrictive government policies on payments in foreign currency in the six months ended June 30, 2015.

(f)	Taxes on income include non-cash tax adjustments in the six months ended June 30, 2015.

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Ceragon Reports Second Quarter 2015 Results

RECONCILIATION BETWEEN REPORTED AND NON-GAAP

NET INCOME (LOSS)

(U.S. dollars in thousands)

(Unaudited)

	Three months ended		Six months ended
	June 30, 2015

Reported GAAP net income (loss)		1,331		(5,664	)

Stock based compensation expenses		378		572
Amortization of intangible assets		326		818
Restructuring expenses		-		1,225
Changes in pre-acquisition indirect tax positions		118		148
Currency devaluation in Venezuela		-		2,973
Non-cash tax adjustments		856		1,590
Non-GAAP net income		3,009		1,662

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