Ceragon Networks Ltd. Announces Record Third Quarter Results; Revenue Increases 56% from Q2 of 2000.Business Editors, High Tech Writers TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel--(BUSINESS WIRE)--Oct. 24, 2000 Ceragon Ceragon Networks Ltd. (NASDAQ: CRNT and TASE: CRNT) is a provider of high-capacity wireless backhaul hardware solutions, which provide high-capacity network connectivity for cellular network infrastructure, fixed networks and private networks. Networks Ltd. (Nasdaq:CRNT CRNT Current ), a global provider of high-capacity broadband wireless See wireless broadband. systems for next generation communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. , today announced record results for the third quarter, which ended September September: see month. 30, 2000. Revenues for the third quarter hit a record at $8.3 million, rising 56.3% from Q2 of 2000 and representing a 538% increase over revenues of $1.3 million in the third quarter of 1999. The rapid revenue growth reflects the company's capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. on the emerging global demand for broadband networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. . Ceragon Networks' successful IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. was completed on August 4th, 2000 and raised approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $98 million. Gross profit(a) in the third quarter was $3.6 million, or 43.2% of revenues, compared to a gross profit of $0.2 million, or 15.7% of revenues, in the third quarter of 1999. Net loss for the third quarter of 2000 was $0.8 million, or $0.04 basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net loss per ordinary share, compared to $1.5 million, or $0.15 basic and diluted net loss per ordinary share for the third quarter of 1999. This compares to a net loss in the second quarter of 2000 of $1.1 million, or $0.08 basic and diluted net loss per ordinary share. Revenues for the first nine months of the year increased to $16.9 million from $2.2 million in the first nine months of 1999. Gross profit for the first nine months was $7.2 million, or 42.7% of revenues, compared to a gross profit of $0.3 million, or 15.0% of revenues, in the first nine months of 1999. Net loss for the first nine months of 2000 was $3.1 million, or $0.21 basic and diluted net loss per ordinary share. Net loss for the first nine months of 1999 was $3.9 million, or $0.59 basic and diluted net loss per ordinary share. "The increased global demand for high-capacity connectivity is favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reflected in our financial performance," said Shraga Katz Katz , Bernard 1911-2003. German-born British physiologist. He shared a 1970 Nobel Prize for the study of nerve impulse transmission. , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Ceragon Networks. "Our financial success reflects a precise execution of our strategy as shown by our industry leading gross margin. We have clearly identified and seized seized (seised) n. 1) having ownership, commonly used in wills as "I give all the property of which I die seized as follows:...." 2) having taken possession of evidence for use in a criminal prosecution. 3) having taken property or a person by force. (See: seisin, seizure) a business opportunity in this market and are accelerating the company's growth by increasing our manufacturing capacity and R&D activities. "We have been able to increase revenues by strengthening our strategic relationships with companies such as Nortel See Nortel Networks. and Siemens, and by expanding commercial deployments worldwide with leading service providers such as FirstMark Communications," continued Katz. "A key differentiator Dif`fer`en´ti`a`tor n. 1. One who, or that which, differentiates. Noun 1. differentiator - a person who (or that which) differentiates discriminator for Ceragon is our broad customer base, which spans North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). ."Note 1 - Pro-forma Financial Presentation Pro-forma results are presented for informational purposes only. Pro-forma financial results exclude the effect of stock-based, non-cash deferred compensation expense and exclude the effect of non-cash dividend related to convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . About Ceragon Networks Ltd. Ceragon Networks Ltd. is a pacesetter in broadband wireless networking systems, enabling high-capacity connectivity in metropolitan areas. Uniquely designed for high-growth, global communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. to generate immediate revenue, Ceragon's commercially proven intelligent broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). network solutions support high-speed Internet See broadband. access and integrated data, video and voice services. Ceragon's FibeAir product family operates across multiple licensed frequencies from 18 to 38 GHz while complying with North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and International standards and delivering IP, SONET/SDH (Synchronous Optical NETwork/Synchronous Digital Hierarchy) A common reference to SONET networks worldwide. See SONET. and ATM broadband networks. Ceragon's products enable quick and cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. connections for capacity constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. business customers within their own networks, or as a gateway onto the backbone backbone: see spinal column. The part of a network that handles the major traffic. It employs the highest-speed transmission paths in the network and may also run the longest distances. infrastructure. Founded in 1996, Ceragon is headquartered in Tel Aviv, Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. , with North American headquarters in New Jersey and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Headquarters in the UK. More information is available at www.ceragon.com. Ceragon Networks -- the shape of next generation networks. (a) Gross profit, net loss and net loss per share are pro-forma (see note 1).
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
PROFORMA (b)
For the three months For the nine months
ended September 30 ended September 30
-------------------- --------------------
1999 2000 1999 2000
--------- --------- --------- ---------
(Unaudited)
---------------------------------------------
Revenues $ 1,307 $ 8,345 $ 2,166 $ 16,881
Cost of revenues 1,101 4,742 1,842 9,669
--------- --------- --------- ---------
Gross profit 206 3,603 324 7,212
--------- --------- --------- ---------
Operating expenses
Research and
development 1,391 2,922 3,530 6,497
Less: participation
by the Chief
Scientist of the
Government of
Israel 394 598 1,096 1,761
--------- --------- --------- ---------
Research and
development,net 997 2,324 2,434 4,736
--------- --------- --------- ---------
Marketing and
selling 580 2,393 1,389 5,438
General and
administrative 142 541 335 1,170
--------- --------- --------- ---------
Total operating
expenses 1,719 5,258 4,158 11,344
--------- --------- --------- ---------
Operating loss (1,513) (1,655) (3,834) (4,132)
Financing income
(expenses), net 50 863 (72) 1,060
--------- --------- --------- ---------
Net loss $(1,463) $ (792) $(3,906) $ (3,072)
--------- --------- --------- ---------
--------- --------- --------- ---------
Net loss attributable
to ordinary
shareholders (1,463) (792) (3,906) (3,072)
Basic and diluted net
loss per ordinary
share $(0.15) $ (0.04) $ (0.59) $ (0.21)
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average
number of ordinary
shares outstanding 9,670,562 18,377,620 6,627,335 14,779,027
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
(b) Pro-forma results are presented for informational purposes only.
Pro-forma financial results exclude the effect of stock-based non-cash
deferred compensation expense and exclude the effect of non-cash
dividend related to convertible preferred shares.
BALANCE SHEET
(In thousands of U.S dollars, except per share data)
December 31 September 30
1999 2000
----------- ------------
(Audited) (Unaudited)
Current assets
Cash and cash equivalents $ 1,149 83,893
Short-term deposits -- 10,084
Trade receivables, net 1,851 6,588
Other receivables 688 3,032
Inventories 2,723 14,599
----------- ------------
Total current assets 6,411 118,196
----------- ------------
Property and equipment
Cost 1,963 5,655
Less - accumulated depreciation 673 1,125
----------- ------------
1,290 4,530
----------- ------------
Deposits with insurance companies 237 425
----------- ------------
Total assets $ 7,938 123,151
----------- ------------
----------- ------------
Current liabilities
Trade payables $ 1,850 7,766
Other payables and accrued expenses 1,196 3,124
----------- ------------
Total current liabilities 3,046 10,890
----------- ------------
Long-term liabilities
Loan from related party 1,173 --
Accrued severance pay 389 830
----------- ------------
Total long-term liabilities 1,562 830
----------- ------------
Total liabilities 4,608 11,720
----------- ------------
Commitments
Shareholders' equity
Share capital
Ordinary shares of NIS 0.01 par value:
Authorized - as of December 31, 1999
and September 30, 2000 17,500,000 and
57,500,000 shares respectively;
issued and outstanding as of
December 31, 1999 and
September 30, 2000 5,240,750
and 20,517,521 shares, respectively 16 52
Preferred shares of NIS 0.01 par value:
Authorized - as of December 31, 1999
and September 30, 2000
20,000,000 and none shares
respectively; issued and outstanding
as of December 31, 1999 and
September 30, 2000 5,052,000 and
none shares, respectively 12 --
Additional paid-in capital 25,471 170,200
Deferred compensation (10,272) (14,462)
Accumulated deficit (11,897) (44,359)
----------- ------------
Total shareholders' equity 3,330 111,431
----------- ------------
Total liabilities and shareholders' equity $ 7,938 123,151
----------- ------------
----------- ------------
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
For the three months For the nine months
ended September 30 ended September 30
--------------------- ---------------------
1999 2000 1999 2000
--------- ---------- --------- ----------
(Unaudited)
--------------------- ---------------------
Revenues $ 1,307 $ 8,345 $ 2,166 $ 16,881
Cost of revenues 1,101 4,742 1,842 9,669
--------- ---------- --------- ----------
Gross profit before
non-cash compensation 206 3,603 324 7,212
expense
Non cash compensation
expense 17 170 48 437
--------- ---------- --------- ----------
Gross profit 189 3,433 276 6,775
--------- ---------- --------- ----------
Operating expenses
Research and
development,net of
non-cash compensation
expense of $49, $1,006,
$123, $2,526 1,391 2,922 3,530 6,497
Less: participation by
the Chief Scientist of
the Government of Israel 394 598 1,096 1,761
--------- ---------- --------- ----------
Research and development,
net 997 2,324 2,434 4,736
--------- ---------- --------- ----------
Marketing and selling,
net of non-cash
compensation expense of
$209, $818, $315, $ 2,333 580 2,393 1,389 5,438
General and
administrative,
net of non cash
compensation expense
of $338, $769, $337,
$1,766 142 541 335 1,170
Amortization of
deferred compensation 596 2,593 775 6,625
--------- ---------- --------- ----------
Total operating
expenses 2,315 7,851 4,933 17,969
--------- ---------- --------- ----------
Operating loss (2,126) (4,418) (4,657) (11,194)
Financing income
(expenses), net 50 863 (72) 1,060
--------- ---------- --------- ----------
Net loss $ (2,076) $ (3,555) $ (4,729) $(10,134)
--------- ---------- --------- ----------
--------- ---------- --------- ----------
Dividend related to
convertible preferred
shares -- -- -- (22,328)
Net loss attributable to
ordinary shareholders (2,076) (3,555) (4,729) (32,462)
Basic and diluted net
loss per ordinary share $ (0.21) $ (0.19) $ (0.71) $ (2.20)
--------- ---------- --------- ----------
--------- ---------- --------- ----------
Weighted average number
of ordinary shares
outstanding 9,670,562 18,377,620 6,627,335 14,779,027
--------- ---------- --------- ----------
--------- ---------- --------- ----------
Certain statements concerning Ceragon's future prospects are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially from forecasts and estimates include: Ceragon's limited operating history and history of losses; Ceragon's dependence on a limited number of key customers, independent manufacturers and suppliers; Ceragon's ability to increase its manufacturing capacity; and the demand for Ceragon's products. These risks and uncertainties, as well as others, are discussed in greater detail in Ceragon's filings with the Securities and Exchange Commission. Ceragon makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date any such statement is made. |
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