CRNT Ceragon Networks Ltd

CERAGON NETWORKS REPORTS 2024 FIRST QUARTER

 FINANCIAL RESULTS

Strong Demand and Bookings Bolster, Confidence of Continued Growth and Margin Expansion

Management Reiterates Full-Year 2024 Outlook

Rosh Ha'ain, Israel, May 7, 2024 -- Ceragon Networks Ltd (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the first quarter period ended March 31, 2024.

 

Q1 2024 Financial Highlights:

 

 

 

 

 

Q1 2024 Business Highlights:

 

- Continued strong bookings, supported by demand for 5G capabilities

- Strongest region in terms of revenue, with record quarterly revenues

 

 

Gross profit was $32.1 million, giving us a gross margin of 36.2%, compared to gross margin of 33.8% in Q1 2023.

 

Operating income was $4.2 million compared to $4.7 million in Q1 2023.

 

Net income was $0.4 million, or $0.00 per diluted share, compared to $2.0 million, or $0.02 per diluted share in Q1 2023.

 

Non-GAAP results were as follows: Gross margin was 36.7%, operating profit was $7.6 million, and net income of $4.7 million, or $0.05 per diluted share.

 

 

Cash and cash equivalents were $28.8 million on March 31, 2024, compared to $28.2 million on December 31, 2023.

 

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

Revenue Breakout by Geography:

Management reiterated its 2024 outlook:

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.

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 Networks

 

Ceragon Networks Ltd. (NASDAQ: CRNT) is the global innovator and leading solutions provider of 5G wireless transport. We help operators and other service providers worldwide increase operational efficiency and enhance end customers' quality of experience with innovative wireless backhaul and fronthaul solutions. Our customers include service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 5G & 4G broadband wireless connectivity, mission-critical multimedia services, stabilized communications, and other applications at high reliability and speed.

Ceragon's unique multicore technology and disaggregated approach to wireless transport provides highly reliable, fast to deploy, high-capacity wireless transport for 5G and 4G networks with minimal use of spectrum, power, real estate, and labor resources. It enables increased productivity, as well as simple and quick network modernization, positioning Ceragon as a leading solutions provider for the 5G era. We deliver a complete portfolio of turnkey end-to-end AI-based managed and professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries. 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 Networks Ltd., 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

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

		Three months ended March 31,
		2024				2023
Revenues			88,498				83,409
Cost of revenues			56,430				55,233
Gross profit			32,068				28,176
Operating expenses:
Research and development, net			8,847				7,938
Sales and marketing			11,261				10,196
General and administrative			5,863				5,324
Restructuring and related charges			1,416				-
Acquisition- and integration-related charges			462				-
Total operating expenses			27,849				23,458
Operating income			4,219				4,718
Financial expenses and others, net			2,861				1,458
Income before taxes			1,358				3,260
Taxes on income			955				1,292
Net income			403				1,968
Basic net income per share			0.00				0.02
Diluted net income per share			0.00				0.02
Weighted average number of shares used in computing basic net income per share			85,520,712				84,354,297
Weighted average number of shares used in computing diluted net income per share			87,584,818				84,992,254

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

		March 31,				December 31,
		2024				2023
		Unaudited				Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			28,783				28,237
Trade receivables, net			97,386				104,321
Inventories			61,029				68,811
Other accounts receivable and prepaid expenses			17,434				16,571
Total current assets			204,632				217,940
NON-CURRENT ASSETS:
Severance pay and pension fund			4,926				4,985
Property and equipment, net			32,836				30,659
Operating lease right-of-use assets			18,063				18,837
Intangible assets, net			16,274				16,401
Goodwill			7,749				7,749
Other non-current assets			1,899				1,954
Total non-current assets			81,747				80,585
Total assets			286,379				298,525
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables			56,511				67,032
Deferred revenues			4,198				5,507
Short-term loans			30,500				32,600
Operating lease liabilities			3,734				3,889
Other accounts payable and accrued expenses			25,454				23,925
Total current liabilities			120,397				132,953
LONG-TERM LIABILITIES:
Accrued severance pay and pension			8,988				9,399
Deferred revenues			670				670
Operating lease liabilities			12,997				13,716
Other long-term payables			8,310				7,768
Total long-term liabilities			30,965				31,553
SHAREHOLDERS' EQUITY:
Share capital			224				224
Additional paid-in capital			438,412				437,161
Treasury shares at cost			(20,091	)			(20,091	)
Other comprehensive loss			(8,743	)			(8,087	)
Accumulated deficit			(274,785	)			(275,188	)
Total shareholders' equity			135,017				134,019
Total liabilities and shareholders' equity			286,379				298,525

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

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

(Unaudited)

		Three months ended March 31,
		2024				2023
GAAP Operating income			4,219				4,718
Stock-based compensation expenses			904				1,170
Amortization of acquired intangible assets			460				-
Excess cost on acquired inventory in business combination (*)			124				-
Restructuring and other charges			1,416				-
Acquisition- and integration-related charges			462				-
Non-GAAP Operating income			7,585				5,888
GAAP Financial expenses and others, net			2,861				1,458
Leases – financial income			112				358
Non-cash revaluation associated with business combination			(673	)			-
Non-GAAP Financial expenses and others, net			2,300				1,816
GAAP Tax expenses			955				1,292
Non-cash tax adjustments			(413	)			(853	)
Non-GAAP Tax expenses			542				439
GAAP Net income			403				1,968
Stock-based compensation expenses			904				1,170
Amortization of acquired intangible assets			460				-
Excess cost on acquired inventory in business combination (*)			124				-
Restructuring and other charges			1,416				-
Acquisition- and integration-related charges			462				-
Leases – financial income			(112	)			(358	)
Non-cash revaluation associated with business combination			673				-
Non-cash tax adjustments			413				853
Non-GAAP Net income			4,743				3,633
GAAP Basic net income per share			0.00				0.02
GAAP Diluted net income per share			0.00				0.02
Non-GAAP Diluted net income per share (**)			0.05				0.04

(*) 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