EX-99 2 exhibit_a.htm EXHIBIT A
Exhibit A


Ceragon Reports 11.5% Increase in Quarterly Revenue, GAAP
EPS of $0.09 Per Share in the Second Quarter

Significant Penetration into Private Networks
Management Reiterates Full-Year 2024 Outlook
 
Rosh Ha'ain, Israel, August 7, 2024 -- Ceragon (NASDAQ: CRNT), the leading solutions provider of end-to-end wireless connectivity, today reported its financial results for the second quarter period ended June 30, 2024.
 
Q2 2024 Financial Highlights:

 •
Revenues of $96.1 million

•
Operating income of $10.4 million on a GAAP basis, or $13.1 million on a non-GAAP basis

•
Net Income of $7.8 million on a GAAP basis, and net income of $9.9 million on a non-GAAP basis

•
EPS of $0.09 per diluted share on a GAAP basis, or $0.11 per diluted share on a non-GAAP basis
 
Q2 2024 Business Highlights:

 •
India:

-
Record quarterly revenues since Q2 2018, including revenue from the new, top-tier customer

-
Substantial ramp up in demand for new IP-50CX product, with more than 20,000 radio units delivered

•
North America:

-
Bookings remain strong, supported by Private Network wins

-
Significant Private Network orders, including nine new customers

-
Six consecutive quarters of revenue above $20 million

Doron Arazi, CEO, commented: “Our stated strategy of diversifying our business by expanding our presence with private networks has been successful. We have added significant bookings from private networks, both in North America and in other key regions, meaningfully growing our business in our addressable market. Demand in India remains robust, and we are growing market share in the region. We also have seen increased interest in our software solutions that can enable recurring revenue growth. New products introduced in the last six months are facilitating our growth, with significant shipments and high levels of customer satisfaction. We are well-positioned for continued profitable growth.”
 
Primary Second Quarter 2024 Financial Results:
 
Revenues were $96.1 million, up 11.5% from $86.2 million in Q2 2023 and up 8.6% from $88.5 million in Q1 2024.
 
GAAP Operating income was $10.4 million compared with $5.7 million for Q2 2023 and $4.2 million for Q1 2024.
 
GAAP Net income was $7.8 million, or $0.09 per diluted share, compared with $2.1 million, or $0.02 per diluted share for Q2 2023 and $0.4 million, or $0.00 per diluted share for Q1 2024.
 
Non-GAAP results were as follows: Gross margin was 35.2%, operating profit was $13.1 million, and net income of $9.9 million, or $0.11 per diluted share. The second quarter included $4 million benefit related to an initial collection from a $12 million debt settlement agreement reached with a South American customer. Another installment was paid during Q3, and the remaining installment is expected to be paid subject to several conditions.
 
Balance Sheet
 
Cash and cash equivalents were $26.3 million on June 30, 2024, compared to $28.8 million on March 31, 2024.
 

For a reconciliation of GAAP to non-GAAP results, see the attached tables.

Revenue Breakout by Geography:

 
Q2 2024
India
37%
North America
24%
EMEA
20%
Latin America
10%
APAC
9%

Outlook
Management reiterated its 2024 outlook:


 •
Revenue of $385 million to $405 million, representing growth of 11% to 17% compared to 2023 revenue. This guidance includes the contribution from Siklu, which was acquired in December 2023.

•
Non-GAAP operating margins are targeted to be at least 10% at the mid-point of the revenue guidance.

•
As a result, management expects increased non-GAAP profit and positive free cash flow for the full year of 2024.

Conference Call

The Company will host a Zoom web conference today at 8:30 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. Recent geopolitical events could impact the live question and answer session. In this unlikely event, management’s prepared remarks will be pre-recorded, and the question and answer session would be rescheduled.

Investors are invited to register by clicking here. All relevant information will be sent upon registration.

If you are unable to join the live call, a replay will be available on our website at www.ceragon.com within 24 hours after the call. 

About Ceragon
 
Ceragon (NASDAQ: CRNT) is the global innovator and leading solutions provider of end-to-end wireless connectivity, specializing in transport, access, and AI-powered managed & professional services. Through our commitment to excellence, we empower customers to elevate operational efficiency and enrich the quality of experience for their end users.
 
Our customers include service providers, utilities, public safety organizations, government agencies, energy companies, and more, who rely on our wireless expertise and cutting-edge solutions for 5G & 4G broadband wireless connectivity, mission-critical services, and an array of applications that harness our ultra-high reliability and speed. Ceragon solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries.
 
Through our innovative, end-to-end solutions, covering hardware, software, and managed & professional services, we enable our customers to embrace the future of wireless technology with confidence, shaping the next generation of connectivity and service delivery. Ceragon delivers extremely reliable, fast to deploy, high-capacity wireless solutions for a wide range of communication network use cases, optimized to lower TCO through minimal use of spectrum, power, real estate, and labor resources - driving simple, quick, and cost-effective network modernization and positioning Ceragon as a leading solutions provider for the “connectivity everywhere” era.
 
For more information please visit: www.ceragon.com
 
Ceragon Networks® and FibeAir® are registered trademarks of Ceragon Networks Ltd. in the United States and other countries. CERAGON® is a trademark of Ceragon, registered in various countries. Other names mentioned are owned by their respective holders.
 

Safe Harbor
This press release contains statements that constitute “forward-looking statements” within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of 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 about Ceragon’s business, financial condition, results of operations, micro and macro market trends and other issues addressed or reflected therein. Examples of forward-looking statements include, but are not limited to, statements regarding: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, supply chain and shipping, components availability; growth prospects, product development, financial resources, cost savings and other financial and market 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, although not all forward-looking statements contain these identifying words.
 
Although we believe that the projections reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such forward-looking statements involve known and unknown risks and uncertainties that may cause Ceragon’s future results or performance to differ materially from those anticipated, expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the effects of global economic trends, including recession, rising inflation, rising interest rates, commodity price increases and fluctuations, commodity shortages and exposure to economic slowdown; The effects of the evolving nature of the war situation in Israel and the related evolving regional conflicts; risks associated with delays in the transition to 5G technologies and in the 5G rollout; risks relating to the concentration of our business on a limited number of large mobile operators and the fact that the significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect us; risks resulting from the volatility in our revenues, margins and working capital needs; disagreements with tax authorities regarding tax positions that we have taken could result in increased tax liabilities; the high volatility in the supply needs of our customers, which from time to time lead to delivery issues and may lead to us being unable to timely fulfil our customer commitments; and such other risks, uncertainties and other factors that could affect our results of operation, as further detailed in Ceragon’s most recent Annual Report on Form 20-F, as published on March 21, 2024, as well as other documents that may be subsequently filed by Ceragon from time to time with the Securities and Exchange Commission.
 
We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Ceragon does not assume any obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless required by law.
 
While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Ceragon’s views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Ceragon does not assume any obligation to update any forward-looking statements unless required by law.
 
The results reported in this press-release are preliminary and unaudited results, and investors should be aware of possible discrepancies between these results and the audited results to be reported, due to various factors.
 
Ceragon’s public filings are available on the Securities and Exchange Commission’s website at www.sec.gov and may also be obtained from Ceragon’s website at www.ceragon.com.
 
Ceragon Investor & Media Contact:
 
Rob Fink
FNK IR
Tel. 1+646-809-4048
crnt@fnkir.com
 

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,
  
   
2024
    
2023
    
2024
    
2023
  
                         
Revenues
    
96,088
      
86,151
      
184,586
      
169,560
  
Cost of revenues
    
62,627
      
55,795
      
119,057
      
111,028
  
                                 
Gross profit
    
33,461
      
30,356
      
65,529
      
58,532
  
                                 
Operating expenses:
                                
   Research and development, net
    
8,385
      
7,812
      
17,232
      
15,750
  
Sales and Marketing
    
11,508
      
9,778
      
22,769
      
19,974
  
General and administrative
    
2,295
      
6,218
      
8,158
      
11,542
  
Restructuring and related charges
    
-
      
897
      
1,416
      
897
  
Acquisition- and integration-related charges
    
915
      
-
      
1,377
      
-
  
                                 
Total operating expenses
    
23,103
      
24,705
      
50,952
      
48,163
  
                                 
Operating income
    
10,358
      
5,651
      
14,577
      
10,369
  
                                 
Financial expenses and others, net
    
1,916
      
1,886
      
4,777
      
3,344
  
                                 
Income before taxes
    
8,442
      
3,765
      
9,800
      
7,025
  
                                 
Taxes on income
    
609
      
1,677
      
1,564
      
2,969
  
                                 
Net income
    
7,833
      
2,088
      
8,236
      
4,056
  
                                 
Basic net income per share
    
0.09
      
0.02
      
0.10
      
0.05
  
Diluted net income per share
    
0.09
      
0.02
      
0.09
      
0.05
  
Weighted average number of shares used in
computing basic net income per share
    
85,743,770
      
84,365,168
      
85,632,241
      
84,359,762
  
Weighted average number of shares used in
computing diluted net income per share
    
87,921,507
      
85,312,954
      
87,753,163
      
85,152,634
  


CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)

   
June 30,
    
December 31,
  
   
2024
    
2023
  
   
Unaudited
    
Audited
  
             
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
    
26,303
      
28,237
  
Trade receivables, net
    
112,895
      
104,321
  
Inventories
    
59,490
      
68,811
  
Other accounts receivable and prepaid expenses
    
17,601
      
16,571
  
                 
Total current assets
    
216,289
      
217,940
  
                 
NON-CURRENT ASSETS:
                
Severance pay and pension fund
    
4,807
      
4,985
  
Property and equipment, net
    
33,853
      
30,659
  
Operating lease right-of-use assets
    
17,817
      
18,837
  
Intangible assets, net
    
16,510
      
16,401
  
Goodwill
    
7,749
      
7,749
  
Other non-current assets
    
2,010
      
1,954
  
                 
Total non-current assets
    
82,746
      
80,585
  
                 
Total assets
    
299,035
      
298,525
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES:
                
Trade payables
    
67,405
      
67,032
  
Deferred revenues
    
2,561
      
5,507
  
Short-term loans
    
28,450
      
32,600
  
Operating lease liabilities
    
3,151
      
3,889
  
Other accounts payable and accrued expenses
    
25,756
      
23,925
  
                 
Total current liabilities
    
127,323
      
132,953
  
                 
LONG-TERM LIABILITIES:
                
Accrued severance pay and pension
    
8,657
      
9,399
  
Deferred revenues
    
670
      
670
  
Operating lease liabilities
    
13,142
      
13,716
  
Other long-term payables
    
5,742
      
7,768
  
                 
Total long-term liabilities
    
28,211
      
31,553
  
                 
SHAREHOLDERS' EQUITY:
                
Share capital
    
224
      
224
  
Additional paid-in capital
    
440,173
      
437,161
  
Treasury shares at cost
    
(20,091
)
    
(20,091
)
Other comprehensive loss
    
(9,853
)
    
(8,087
)
Accumulated deficit
    
(266,952
)
    
(275,188
)
                 
Total shareholders' equity
    
143,501
      
134,019
  
                 
Total liabilities and shareholders' equity
    
299,035
      
298,525
  


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
                         
Cash flow from operating activities:
                        
Net income
    
7,833
      
2,088
      
8,236
      
4,056
  
Adjustments to reconcile net income to net cash provided by operating activities:
                                
Depreciation and amortization
    
2,941
      
2,582
      
5,880
      
5,135
  
Loss from sale of property and equipment, net
    
169
      
20
      
169
      
30
  
Stock-based compensation expense
    
1,566
      
808
      
2,470
      
1,977
  
Decrease in accrued severance pay and pensions, net
    
(212
)
    
(280
)
    
(564
)
    
(344
)
Increase in trade receivables, net
    
(16,023
)
    
(6,620
)
    
(9,247
)
    
(6,910
)
Decrease (increase) in other assets (including other accounts receivable, prepaid expenses,
other non-current assets, and the effect of exchange rate changes on cash and cash equivalents)
    
(652
)
    
(445
)
    
(1,383
)
    
551
  
Decrease in inventory
    
1,186
      
893
      
8,555
      
4,059
  
Decrease in operating lease right-of-use assets
    
1,694
      
886
      
2,626
      
1,897
  
Increase (decrease) in trade payables
    
12,075
      
2,835
      
589
      
(3,955
)
Increase (decrease) in other accounts payable and accrued expenses (including other long-term payables)
    
(2,196
)
    
2,620
      
(94
)
    
2,326
  
Decrease in operating lease liability
    
(1,922
)
    
(1,152
)
    
(2,942
)
    
(2,518
)
Increase (decrease) in deferred revenues
    
(1,637
)
    
(1,054
)
    
(2,946
)
    
386
  
Net cash provided by operating activities
    
4,822
      
3,181
      
11,349
      
6,690
  
Cash flow from investing activities:
                                
Purchases of property and equipment, net
    
(4,562
)
    
(2,330
)
    
(7,955
)
    
(5,472
)
Software development costs capitalized
    
(676
)
    
(549
)
    
(989
)
    
(1,837
)
Net cash used in investing activities
    
(5,238
)
    
(2,879
)
    
(8,944
)
    
(7,309
)
                                 
Cash flow from financing activities:
                                
Proceeds from exercise of stock options
    
284
      
30
      
542
      
30
  
Proceeds from (repayments of) bank credits and loans, net
    
(2,050
)
    
(2,300
)
    
(4,150
)
    
2,050
  
Net cash provided by (used in) financing activities
    
(1,766
)
    
(2,270
)
    
(3,608
)
    
2,080
  
                                 
Effect of exchange rate changes on cash and cash equivalents
    
(298
)
    
74
      
(731
)
    
120
  
Increase (decrease) in cash and cash equivalents
    
(2,480
)
    
(1,894
)
    
(1,934
)
    
1,581
  
Cash and cash equivalents at the beginning of the period
    
28,783
      
26,423
      
28,237
      
22,948
  
Cash and cash equivalents at the end of the period
    
26,303
      
24,529
      
26,303
      
24,529
  


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

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
                         
GAAP cost of revenues
    
62,627
      
55,795
      
119,057
      
111,028
  
Stock-based compensation expenses
    
(134
)
    
(48
)
    
(265
)
    
(228
)
Amortization of acquired intangible assets
    
(189
)
    
-
      
(378
)
    
-
  
Excess cost on acquired inventory in business combination (*)
    
-
      
-
      
(124
)
    
-
  
Non-GAAP cost of revenues
    
62,304
      
55,747
      
118,290
      
110,800
  
                                 
GAAP gross profit
    
33,461
      
30,356
      
65,529
      
58,532
  
Stock-based compensation expenses
    
134
      
48
      
265
      
228
  
Amortization of acquired intangible assets
    
189
      
-
      
378
      
-
  
Excess cost on acquired inventory in business combination (*)
    
-
      
-
      
124
      
-
  
Non-GAAP gross profit
    
33,784
      
30,404
      
66,296
      
58,760
  
                                 
GAAP Research and development expenses
    
8,385
      
7,812
      
17,232
      
15,750
  
Stock-based compensation expenses
    
(184
)
    
(232
)
    
(336
)
    
(478
)
Non-GAAP Research and development expenses
    
8,201
      
7,580
      
16,896
      
15,272
  
                                 
GAAP Sales and marketing expenses
    
11,508
      
9,778
      
22,769
      
19,974
  
Stock-based compensation expenses
    
(387
)
    
(363
)
    
(683
)
    
(739
)
Amortization of acquired intangible assets
    
(117
)
    
-
      
(388
)
    
-
  
Non-GAAP Sales and marketing expenses
    
11,004
      
9,415
      
21,698
      
19,235
  
                                 
GAAP General and administrative expenses
    
2,295
      
6,218
      
8,158
      
11,542
  
Stock-based compensation expenses
    
(861
)
    
(167
)
    
(1,186
)
    
(535
)
Non-GAAP General and administrative expenses
    
1,434
      
6,051
      
6,972
      
11,007
  
                                 
GAAP Restructuring and related charges
    
-
      
897
      
1,416
      
897
  
Restructuring and related charges
    
-
      
(897
)
    
(1,416
)
    
(897
)
Non-GAAP Restructuring and related charges
    
-
      
-
      
-
      
-
  
                                 
GAAP Acquisition- and integration-related charges
    
915
      
-
      
1,377
      
-
  
Acquisition- and integration-related charges
    
(915
)
    
-
      
(1,377
)
    
-
  
Non-GAAP Acquisition- and integration-related charges
    
-
      
-
      
-
      
-
  


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

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
                         
GAAP Operating income
    
10,358
      
5,651
      
14,577
      
10,369
  
Stock-based compensation expenses
    
1,566
      
810
      
2,470
      
1,980
  
Amortization of acquired intangible assets
    
306
      
-
      
766
      
-
  
Excess cost on acquired inventory in business combination (*)
    
-
      
-
      
124
      
-
  
Restructuring and other charges
    
-
      
897
      
1,416
      
897
  
Acquisition- and integration-related charges
    
915
      
-
      
1,377
      
-
  
Non-GAAP Operating income
    
13,145
      
7,358
      
20,730
      
13,246
  
                                 
GAAP Financial expenses and others, net
    
1,916
      
1,886
      
4,777
      
3,344
  
Leases – financial income
    
207
      
285
      
319
      
643
  
Non-cash revaluation associated with business combination
    
477
      
-
      
(196
)
    
-
  
Non-GAAP Financial expenses and others, net
    
2,600
      
2,171
      
4,900
      
3,987
  
                                 
GAAP Tax expenses
    
609
      
1,677
      
1,564
      
2,969
  
Non cash tax adjustments
    
-
      
(890
)
    
(413
)
    
(1,743
)
Non-GAAP Tax expenses
    
609
      
787
      
1,151
      
1,226
  
                                 
GAAP Net income
    
7,833
      
2,088
      
8,236
      
4,056
  
Stock-based compensation expenses
    
1,566
      
810
      
2,470
      
1,980
  
Amortization of acquired intangible assets
    
306
      
-
      
766
      
-
  
Excess cost on acquired inventory in business combination (*)
    
-
      
-
      
124
      
-
  
Restructuring and other charges
    
-
      
897
      
1,416
      
897
  
Acquisition- and integration-related charges
    
915
      
-
      
1,377
      
-
  
Leases – financial income
    
(207
)
    
(285
)
    
(319
)
    
(643
)
Non-cash revaluation associated with business combination
    
(477
)
    
-
      
196
      
-
  
Non-cash tax adjustments
    
-
      
890
      
413
      
1,743
  
Non-GAAP Net income  
    
9,936
      
4,400
      
14,679
      
8,033
  
                                 
GAAP basic net income per share
    
0.09
      
0.02
      
0.10
      
0.05
  
                                 
GAAP diluted net income per share
    
0.09
      
0.02
      
0.09
      
0.05
  
                                 
Non-GAAP Diluted net income per share (**)
    
0.11
      
0.05
      
0.17
      
0.09
  

(*) Consists of charges to cost of revenues for the difference between the fair value of acquired inventory in business combination, which was recorded at fair value, and the actual cost of this inventory, which impacts the Company’s gross profit.

(**) Weighted average number of shares used in computing diluted net income per share is the same as in GAAP