U.S. Markets closed
  • S&P 500

    4,431.85
    +105.34 (+2.43%)
     
  • Dow 30

    34,725.47
    +564.69 (+1.65%)
     
  • Nasdaq

    13,770.57
    +417.79 (+3.13%)
     
  • Russell 2000

    1,968.51
    +37.22 (+1.93%)
     
  • Crude Oil

    87.29
    +0.68 (+0.79%)
     
  • Gold

    1,790.10
    -3.00 (-0.17%)
     
  • Silver

    22.49
    -0.19 (-0.82%)
     
  • EUR/USD

    1.1152
    +0.0005 (+0.0446%)
     
  • 10-Yr Bond

    1.7820
    -0.0250 (-1.38%)
     
  • Vix

    27.66
    -2.83 (-9.28%)
     
  • GBP/USD

    1.3401
    +0.0019 (+0.1447%)
     
  • USD/JPY

    115.1900
    -0.1120 (-0.0971%)
     
  • BTC-USD

    37,722.10
    +819.73 (+2.22%)
     
  • CMC Crypto 200

    863.83
    +21.37 (+2.54%)
     
  • FTSE 100

    7,466.07
    -88.24 (-1.17%)
     
  • Nikkei 225

    26,717.34
    +547.04 (+2.09%)
     

Ceragon Networks Reports 2021 First Quarter Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·14 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • CRNT

Q1 2021 Financial Highlights:

- Revenues of $68.3 million

- Operating Income of $0.4 million on a GAAP basis, or $0.7 million on a non-GAAP basis

- EPS of $(0.01) per diluted share on a GAAP basis, or $(0.01) per diluted share on a non-GAAP basis

Q1 2021 Business Highlights:

- Strong bookings in Europe, North America, Latin America and India; book-to-bill way above 1

- Twelve 5G design wins to date, across all geographies

- Accelerated 5G evolution and OpenRAN momentum expected to drive multi-year growth

- New SoC for 5G is progressing and expected to be taped-out in July 2021

LITTLE FALLS, N.J., May 3, 2021 /PRNewswire/ -- 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 ended March 31, 2021.

Ira Palti, President & CEO, commented: "2021 has been off to a good start both for the telecom industry in general and for us at Ceragon specifically. The amount of data flowing around the globe has increased at an exponential rate. As Tier-1 and Tier-2 operators step up their efforts to provide enhanced 4G coverage as well as new 5G services, many of them turn to Ceragon."

"In Q1 2021, the accelerated 5G evolution along with the growing OpenRan movement has kept Ceragon's growing suite of innovative solutions in the spotlight. We achieved three new 5G design wins, saw very strong bookings across different regions, and were selected to participate in an OpenRan trial in TIM Brazil. Even though the industry is currently facing component shortages, which might affect our short-term deliveries, the global telecom industry is fast moving into a new era and Ceragon is well prepared to excel in it."

"As the Company's president & CEO for the last sixteen years, I've led the company from a simpler 2G world into today's more complex OpenRan, 5G world. It's with peace of mind and a feeling of accomplishment that I pass the keys of the CEO office to our successful former deputy CEO & CFO Doron Arazi. I'll continue serving Ceragon as vice-chairman of the board starting July."

Primary First Quarter 2021 Financial Results:

Revenues were $68.3 million, up 22.2% from $55.9 million in Q1 2020 and down 7.7% from $74.0 million in Q4 2020. Our revenues varied from region to region and were in line with the effect that COVID has had on local business operations and network build-out plans.

Gross profit was $20.1 million, giving us a gross margin of 29.5%, compared with a gross margin of 25.1% in Q1 2020 and 29.1% in Q4 2020. The relatively low gross margin reflects continued high supply chain costs due to the COVID-19 environment.

Operating income (loss) was $0.4 million compared with operating loss of $(6.0) million for Q1 2020 and $(1.5) million for Q4 2020.

Net loss was $(1.2) million, or $(0.01) per diluted share compared with $(6.9) million, or $(0.09) per diluted share for Q1 2020 and $(6.3) million, or $(0.08) per diluted share for Q4 2020.

Non-GAAP results were as follows: Gross margin was 29.6%, operating profit was $0.7 million, and net loss was $(0.9) million, or $(0.01) per diluted share.

Cash and cash equivalents was $33.0 million at March 31, 2021, compared to $27.1 million at December 31, 2020.

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

Revenue Breakouts by Geography:


Q1 2021

India

26%

Europe

19%

North America

17%

Latin America

15%

APAC

14%

Africa

9%

Outlook

We continue to target revenue growth in 2021. Although we still expect a slow start for the first half of the year, we continue to expect yearly revenue to be between $275-$295 million. Now all that said, the growing component shortage may have a negative impact on the timeliness of our Q2 and rest-of-the-year deliveries and may lead to a probable push of revenues between quarters until the shortage is resolved.

Conference Call

The Company will host a Zoom web conference today at 9:00a.m. ET to discuss the results, followed by a question and answer session for the investment community.

Investors are invited to register by clicking the following link: https://us02web.zoom.us/webinar/register/WN_ZrHJ225HTJKmGqKKHgWtTA. All relevant information will be sent upon registration.

If you are unable to join us live, a recording of the call 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, mission-critical multimedia services 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 range of professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 400 service providers, as well as more than 800 private network owners, in more than 150 countries. For more information please visit: www.ceragon.com

Safe Harbor

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 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: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, 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 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 statements involve risks and uncertainties that may cause future results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, the effects of general economic conditions, the effect of the COVID-19 crisis on the global markets and on the markets in which we operate, including the risk of a continued disruption to our and our customers', providers', business partners and contractors' business and operations as a result of the COVID-19 pandemic effects and the restrictions on operations created thereby, and of an adverse effect on our and our customers' financial performance, cash flow, revenue and financial results, available cash and financing, and our ability to bill and collect amounts due from our customers as a result therefrom; the risk of components shortage due to the global shortage in semiconductors and chipsets, which could cause delays in deliveries of our products and delays in the deployment of wireless communication networks by our customers, slowdowns and other adverse effects on our industry; the risks relating to the concentration of a significant portion of Ceragon's expected business in certain countries and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues; risks associated with any failure to meet our product development timetable; the risk that the rollout of 5G services could take longer or be performed differently than anticipated and such other risks, uncertainties and other factors that could affect our results, as further detailed in Ceragon's most recent Annual Report on Form 20-F and in Ceragon's other filings with the Securities and Exchange Commission.

Such forward-looking statements, including the risks, uncertainties and other factors that could affect our results, 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. Such forward-looking statements do not purport to be predictions of future events or results and there can be no assurance that it will prove to be accurate. Ceragon may elect to update these forward-looking statements at some point in the future but the company specifically disclaims any obligation to do so except as may be required by law.

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.

Investor & Media Contact:
Maya Lustig
Ceragon Networks
Tel. +972-54-677-8100
mayal@ceragon.com

- Tables Follow -

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)


Three months ended
March 31,


2021


2020











Revenues

$ 68,270


$ 55,871

Cost of revenues

48,124


41,861






Gross profit

20,146


14,010





Operating expenses:




Research and development, net

7,410


7,290

Selling and marketing

8,290


8,273

General and administrative

4,093


4,456









Total operating expenses

$ 19,793


$ 20,019





Operating income (loss)

353


(6,009)





Financial expenses and others, net

1,051


308





Loss before taxes

(698)


(6,317)





Taxes on income

475


380

Equity loss in affiliates

-


183






Net loss

$ (1,173)


$ (6,880)






Basic net loss per share

$ (0.01)


$ (0.09)

Diluted net loss per share

$ (0.01)


$ (0.09)






Weighted average number of shares used in computing
basic net loss per share

82,583,760


80,764,932






Weighted average number of shares used in computing
diluted net loss per share

82,583,760


80,764,932

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

(Unaudited)




March 31,
2021


December 31,
2020

ASSETS


Unaudited


Audited






CURRENT ASSETS:





Cash and cash equivalents


$ 33,011


$ 27,101

Trade receivables, net


106,712


107,388

Other accounts receivable and prepaid expenses


13,202


14,755

Inventories


48,542


50,627






Total current assets


201,467


199,871






NON-CURRENT ASSETS:





Deferred tax assets


8,269


8,279

Severance pay and pension fund


5,899


6,059

Property and equipment, net


31,063


31,748

Operating lease right-of-use assets


23,701


6,780

Intangible assets, net


6,018


6,117

Other non-current assets


14,681


13,565






Total non-current assets


89,631


72,548






Total assets


$ 291,098


$ 272,419






LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





Trade payables


$ 61,813


$ 63,722

Deferred revenues


3,489


3,492

Short-term loans


11,979


5,979

Operating lease liabilities


4,752


3,183

Other accounts payable and accrued expenses


20,480


24,048






Total current liabilities


102,513


100,424






LONG-TERM LIABILITIES:





Accrued severance pay and pension


11,238


11,601

Deferred revenues


9,035


7,495

Operating lease liabilities


19,006


3,840

Other long-term payables


2,909


2,933






Total long-term liabilities


42,188


25,869






SHAREHOLDERS' EQUITY:





Share capital:





Ordinary shares


223


218

Additional paid-in capital


424,993


420,958

Treasury shares at cost


(20,091)


(20,091)

Other comprehensive loss


(10,664)


(8,068)

Accumulated deficits


(248,064)


(246,891)






Total shareholders' equity


146,397


146,126






Total liabilities and shareholders' equity


$ 291,098


$ 272,419

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars, in thousands)

(Unaudited)



Three months ended

March 31,



2021


2020


Cash flow from operating activities:





Net loss

$ (1,173)


$ (6,880)


Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:





Depreciation and amortization

2,886


2,704


Gain from sale of property and equipment, net

(128)


-


Stock-based compensation expense

351


426


Decrease in accrued severance pay and pensions, net

(203)


(443)


Decrease in trade receivables, net

413


12,586


Increase in other accounts receivable and prepaid expenses (including
other long term assets)

(1,092)


(2,074)


Decrease in operating lease right-of-use assets

1,269


1,356


Decrease in inventory, net of write off

1,718


1,997


Decrease (increase) in deferred tax asset, net

10


(24)


Decrease in trade payables

(2,131)


(4,440)


Decrease in other accounts payable and accrued expenses (including
other long term liabilities)

(3,656)


(1,883)


Decrease in operating lease liability

(1,455)


(1,807)


Increase in deferred revenues

1,537


1,609


Net cash provided by (used in) operating activities

$ (1,654)


$ 3,127


Cash flow from investing activities:





Purchase of property and equipment, net

(2,203)


(959)


Proceeds from sale of property and equipment, net

200


-


Purchase of intangible assets, net

-


(243)


Net cash used in investing activities

$ (2,003)


$ (1,202)







Cash flow from financing activities:





Proceeds from exercise of options

3,689


246


Proceeds from bank credits and loans, net

6,000


18,255


Net cash provided by financing activities

$ 9,689


$ 18,501







Translation adjustments on cash and cash equivalents

$ (122)


$ (245)


Increase in cash and cash equivalents

$ 5,910


$ 20,181


Cash and cash equivalents at the beginning of the period

27,101


23,939


Cash and cash equivalents at the end of the period

$ 33,011


$ 44,120


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS

(U.S. dollars in thousands)

(Unaudited)




Three months ended




March 31,




2021


2020










GAAP cost of revenues


$

48,124


$

41,861


Stock based compensation expenses



(36)



(27)


Changes in indirect tax positions



(1)



(1)


Non-GAAP cost of revenues


$

48,087


$

41,833










GAAP gross profit


$

20,146


$

14,010


Stock based compensation expenses



36



27


Changes in indirect tax positions



1



1


Non-GAAP gross profit


$

20,183


$

14,038










GAAP Research and development expenses


$

7,410


$

7,290


Stock based compensation expenses



(52)



(89)



Non-GAAP Research and development expenses


$

7,358


$

7,201










GAAP Sales and Marketing expenses


$

8,290


$

8,273


Stock based compensation expenses



(104)



(100)


Non-GAAP Sales and Marketing expenses


$

8,186


$

8,173










GAAP General and Administrative expenses


$

4,093


$

4,456


Stock based compensation expenses



(159)



(210)


Non-GAAP General and Administrative expenses


$

3,934


$

4,246


GAAP operating income (loss)


$

353


$

(6,009)


Stock based compensation expenses



351



426


Changes in indirect tax positions



1



1


Non-GAAP operating income (loss)


$

705


$

(5,582)


GAAP financial expenses and others, net


$

1,051


$

308


Leases – financial income



186



450


Non-GAAP financial expenses and others, net


$

1,237


$

758










GAAP Tax expenses


$

475


$

380


Non cash tax adjustments



(128)



(15)


Non-GAAP Tax expenses


$

347


$

365










GAAP equity loss in affiliates


$

-


$

183


Other non-cash adjustments



-



(183)


Non-GAAP equity loss in affiliates


$

-


$

-



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,







2021



2020














GAAP net loss


$

(1,173)


$

(6,880)




Stock based compensation

Expenses



351



426




Changes in indirect tax positions



1



1




Leases – financial income



(186)



(450)




Non-cash tax adjustments



128



15




Other non-cash adjustment



-



183




Non-GAAP net loss


$

(879)


$

(6,705)














GAAP basic net loss per share


$

(0.01)


$

(0.09)














GAAP diluted net loss per share


$

(0.01)


$

(0.09)




Non-GAAP diluted net loss per share


$

(0.01)


$

(0.08)














Weighted average number of shares used in
computing GAAP basic net loss per share



82,583,760



80,764,932














Weighted average number of shares used in
computing GAAP diluted net loss per share



82,583,760



80,764,932














Weighted average number of shares used in
computing Non-GAAP diluted net loss per share



82,583,760



80,764,932



Cision
Cision

View original content:http://www.prnewswire.com/news-releases/ceragon-networks-reports-2021-first-quarter-financial-results-301282032.html

SOURCE Ceragon Networks Ltd