Ceragon Networks Ltd. Reports Financial Results for First Quarter 2001.Business & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Editors 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)--April 23, 2001 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 reported results for the first quarter, which ended March 31, 2001. Revenues for the first quarter were $12.6 million, as compared to $12.3 million in the fourth quarter of 2000, representing a 294% increase in revenues from $3.2 million in the first quarter of 2000. In the first quarter of 2001, the company incurred one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of $2.6 million for doubtful debt and $11.05 million for an inventory write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. . These charges are excluded from the pro-forma consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of operations. See note 1 below. Pro-forma gross profit in the first quarter of 2001 was $5.5 million, or 44.1% of revenues, compared to pro-forma gross profit of $5.4 million, or 43.7% of revenues in the fourth quarter of 2000, and to a pro-forma gross profit of $1.3 million, or 41.2% of revenues in the first quarter of 2000. Pro-forma net loss for the first quarter of 2001 was $(1.9) million, or $(0.09) 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 a pro-forma net loss in the fourth quarter of 2000 of $(0.3) million, or $(0.01) basic and diluted net loss per ordinary share. This compares to a pro-forma net loss of $(1.2) million, or $(0.22) basic and diluted net loss per ordinary share in the first quarter of 2000. Reflecting one-time charges, the effect of stock-based non-cash deferred compensation expenses, and the effect of a 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. in 2000, gross profit for the first quarter of 2001 was negative $(5.6) million, or negative (44.8)% of revenues, compared to a gross profit of $5.2 million, or 42.3% of revenues in the fourth quarter of 2000, and to a gross profit of $1.2 million, or 38.2% of revenues in the first quarter of 2000. Net loss for the first quarter of 2001, including the foregoing charges, expenses and non-cash dividend was $(17.7) million, or $(0.86) basic and diluted net loss per ordinary share. This compares to a net loss in the fourth quarter of 2000 of $(2.7) million or $(0.13) basic and diluted net loss per ordinary share, and to $(3.0) million, or $(0.57) basic and diluted net loss per ordinary share in the first quarter of 2000. "Despite the rapid downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the U.S. CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) market and the resulting short term difficulties, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op as demand for high-capacity connectivity continues to increase. We believe that wireline technologies alone are not able to keep up with this increasing demand," 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 Ltd. "Ceragon remains confident in its on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" strategy based on customer and geographic diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , which has enabled us to achieve commercial deployments in more than 25 countries. Our longer term strategic goals to expand our presence in other markets, including ILECs, Cellular and Enterprise, will be met by leveraging our technology expertise, strong sales channels, and diverse customer base." Market difficulties, as illustrated by the recent Chapter 11 bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filing of Winstar Communications and the announced intention to file for Chapter 11 bankruptcy protection by Advanced Radio Telecom, has reduced visibility, and revenues for the upcoming quarters are expected to decline. The company is reducing its operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by approximately 30-40%. Actions to be taken include a reduction in headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. of approximately 25% and closing a secondary manufacturing facility. One-time charges related to these efforts are estimated to be $4-7 million. Overall expenses are expected to be reduced commencing the third quarter. Note 1 -- Pro-Forma Financial Presentation Pro-forma results are presented for informational purposes only. Pro-forma financial results for all periods presented exclude the effect of stock-based, non-cash deferred compensation expenses, and exclude the effect of a non-cash dividend related to convertible preferred shares in 2000. In addition, the pro-forma results for the first quarter of 2001 exclude one-time charges of $2.6 million for doubtful debt presented in general and administrative expenses, and $11.05 million for an inventory write-down presented in cost of revenues. 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  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. . 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. Ceragon was the first fixed wireless technology provider to break the 155 Mbps capacity barrier in the 38 GHz frequency band, the first to commercially deploy a wireless 311 Mbps system and the first to announce a high frequency wireless Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. System. 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. Ceragon Networks(TM), FibeAir(TM), ConfigAir(TM), CeraView(TM), CeraMon(TM), EtherAir(TM), and Microwave microwave, electromagnetic wave having a frequency range from 1,000 megahertz (MHz) to 300,000 MHz, corresponding to a wavelength range from 300 mm (about 12 in.) to 1 mm (about 0.04 in.). Like light waves, microwaves travel essentially in straight lines. Fiber(TM) are trademarks of Ceragon Networks Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
PRO-FORMA(a)
For the year
For the three months ended
ended March 31 December 31
---------------------- -------------
2000 2001 2000
---------- ----------- -------------
(UnAudited) (UnAudited)
---------------------- -------------
Revenues $ 3,198 $ 12,585 $ 29,197
Cost of revenues 1,879 7,039 16,605
---------- ----------- -------------
Gross profit (loss) 1,319 (5,546) 12,592
---------- ----------- -------------
Operating expenses
Research and development 1,600 4,374 9,904
Less: participation by the
Chief Scientist of the
Government of Israel 630 902 2,211
---------- ----------- -------------
Research and development, net 970 3,472 7,693
---------- ----------- -------------
Marketing and selling 1,194 3,918 8,790
General and administrative 276 941 1,926
---------- ----------- -------------
Total operating expenses 2,440 8,331 18,409
---------- ----------- -------------
Operating loss (1,121) (2,785) (5,817)
Financing income (expenses), net (45) 844 2,470
---------- ----------- -------------
Net loss $ (1,166) $ (1,941) $ (3,347)
========== =========== =============
Net loss attributable to
ordinary shareholders (1,166) (1,941) (3,347)
========== =========== =============
Basic and diluted net loss
per ordinary share $ (0.22) $ (0.09) $ (0.29)
========== =========== =============
Weighted average number of
ordinary shares outstanding 5,240,750 20,657,432 11,501,722
========== =========== =============
(a) Pro-forma Financial Presentation
Pro-forma results are presented for informational purposes only.
Pro-forma financial results for all periods presented exclude the
effect of stock-based, non-cash deferred compensation expenses, and
exclude the effect of a non-cash dividend related to convertible
preferred shares in 2000. In addition, the pro-forma results for the
first quarter of 2001 exclude one-time charges of $2.6 million for
doubtful debt presented in general and administrative expenses, and
$11.05 million for an inventory write-down presented in cost of
revenues.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
For the For the year
three months ended
ended March 31 December 31
---------------------- -------------
2000 2001 2000
---------- ----------- -------------
(Unaudited) (Audited)
---------------------- -------------
Revenues $ 3,198 $ 12,585 $ 29,197
Cost of revenues 1,879 18,089 16,605
---------- ----------- -------------
Gross profit (loss) before
non cash Compensation expense 1,319 (5,504) 12,592
Non cash compensation expense 96 130 603
---------- ----------- -------------
Gross profit (loss) 1,223 (5,634) 11,989
---------- ----------- -------------
Operating expenses
Research and development, net of
non cash compensation expense
of $606, $741, $3,408 1,600 4,374 9,904
Less: participation by the
Chief Scientist of the
Government of Israel 630 902 2,211
---------- ----------- -------------
Research and development, net 970 3,472 7,693
---------- ----------- -------------
Marketing and selling, net of
non cash compensation expense
of $691, $633, $3,085 1,194 3,918 8,790
General and administrative, net of
non cash compensation expense
of $425, $563, $2,433 276 3,573 1,926
Amortization of deferred compensation 1,722 1,937 8,926
---------- ----------- -------------
Total operating expenses 4,162 12,900 27,335
---------- ----------- -------------
Operating loss (2,939) (18,534) (15,346)
Financing income (expenses), net (45) 844 2,470
---------- ----------- -------------
Net loss (2,984) (17,690) (12,876)
---------- ----------- -------------
Dividend related to convertible
preferred shares - - (22,328)
---------- ----------- -------------
Net loss attributable to
ordinary shareholders $ (2,984) $ (17,690) $ (35,204)
========== =========== =============
Basic and diluted net loss
per ordinary share $ (0.57) $ (0.86) $ (3.06)
========== =========== =============
Weighted average number of
ordinary shares outstanding 5,240,750 20,657,432 11,501,722
========== =========== =============
BALANCE SHEETS
(In thousands of U.S. dollars)
March 31 December 31
2001 2000
(Unaudited) (Audited)
----------- ------------
Current assets
Cash and cash equivalents $ 35,090 $ 70,064
Short-term deposits 22,231 10,256
Short-term investments 9,831 -
Trade receivables, net 9,108 12,705
Other receivables 6,591 5,300
Inventories 21,581 22,190
----------- ------------
Total current assets 104,432 120,515
----------- ------------
Property and equipment
Cost 11,027 8,469
Less - accumulated depreciation 1,918 1,455
9,109 7,014
----------- ------------
Deposits with insurance companies 609 521
----------- ------------
Total assets $ 114,150 $ 128,050
=========== ============
Current liabilities
Trade payables $ 13,833 $ 12,463
Other payables and accrued expenses 3,703 3,494
----------- ------------
Total current liabilities 17,536 15,957
----------- ------------
Long-term liabilities
Accrued severance pay 1,203 1,025
----------- ------------
Total long-term liabilities 1,203 1,025
----------- ------------
Total liabilities 18,739 16,982
----------- ------------
Commitments
Shareholders' equity
Share capital
Ordinary shares of NIS 0.01 par value:
Authorized - as of December 31, 2000 and
March 31, 2001
40,000,000 shares; issued and
outstanding as of December 31, 2000
and March 31, 2001 20,517,521 and
20,832,321 shares, respectively 53 52
Additional paid-in capital 170,195 170,348
Deferred compensation (10,046) (12,231)
Accumulated deficit (64,791) (47,101)
----------- ------------
Total shareholders' equity 95,411 111,068
----------- ------------
Total liabilities and shareholders' equity $ 114,150 $ 128,050
=========== ============
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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