Ceragon Networks Reports Financial Results for Second Quarter 2001.Business 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)--July 26, 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 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. and mobile operators, today reported results for the second quarter ending June June: see month. 30, 2001. Revenues for the second quarter were $5.9 million, representing a 9.6% increase in revenues as compared to $5.3 million in the second quarter of 2000. This compares to revenues of $12.6 million in the first quarter of 2001. Pro-forma(a) gross profit in the second quarter of 2001 was $1.9 million, or 32% of revenues. This compares to pro-forma gross profit in the second quarter of 2000 of $2.3 million, or 42.9% of revenues. The decrease in gross profit is a direct result of lower demand, and reflects the corresponding lower production volumes and higher proportional proportional values expressed as a proportion of the total number of values in a series. proportional dwarf the patient is a miniature without disproportionate reductions or enlargements of body parts. overhead costs overhead costs see fixed costs. . Pro-forma net loss for the second quarter of 2001 was $(4.7) million, or $(0.23) 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 the pro-forma net loss of $(1.1) million, or $(0.21) basic and diluted net loss per ordinary share, in the second quarter of 2000. The results for the second quarter of 2001 exclude one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of $4.7 million in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan. 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.(a) For an explanation of pro-forma results see note 1 below. "The second quarter was difficult, as anticipated. We responded early to market conditions by reducing our expense base and significantly reducing our cash utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be rate. In line with our strategy, we refocused our efforts into three markets -- cellular backhaul (1) The original definition of backhaul was to transmit a telephone call or data beyond its normal destination point and then back again in order to utilize available personnel (operators, agents, etc.) or network equipment that is not located at the destination location. , metropolitan infrastructure and enterprise," 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. Katz continued, "We believe that demand for high-capacity connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. in advanced cellular networks will be strong. In anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, of this increasing cellular demand, we expanded our FibeAir product family to include the 13 and 15 GHz frequency bands. These products support longer-range connectivity and open new geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. opportunities for Ceragon. In addition, this past quarter we shipped FibeAir systems to more than 30 customers, including a leading U.S. incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. and major international cellular operators. "At Ceragon, we are confident in our vision and 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. Looking forward, we believe that we will emerge from this period as a market leader," Katz concluded. A conference call discussing Ceragon's second quarter 2001 results will take place today, July July: see month. 26th, at 5:00 p.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). A replay of the call can be found approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours later on Ceragon's website -- www.ceragon.com. 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 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. In addition, the pro-forma results for the six months ended June 30, 2001 exclude one-time charges of $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. presented in cost of revenues, $2.6 million for doubtful debt presented in general and administrative expenses, and $4.7 million due to restructuring plans presented in restructuring costs. The pro-forma results for the three months ended June 30, 2001 exclude one-time charges of $4.7 million due to restructuring plans presented in restructuring costs. About Ceragon Networks Ltd. Ceragon Networks Ltd. (Nasdaq:CRNT) is a pacesetter in broadband wireless networking systems, enabling 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. high-capacity connectivity. Ceragon's products are uniquely designed for communications service providers and mobile operators to enable them to generate immediate revenue. The company'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 multiple applications for the high-capacity metropolitan access, cellular backhaul and private networks markets. Ceragon's FibeAir product family operates across multiple frequencies from 13 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. As a global provider, Ceragon delivers IP, SONET/SDH (Synchronous Optical NETwork/Synchronous Digital Hierarchy) A common reference to SONET networks worldwide. See SONET. and ATM broadband networking equipment that is installed with over 50 customers in more than 25 countries. Ceragon was the first fixed wireless technology provider to break the 155 Mbps capacity barrier in high-frequency bands and the first to commercially deploy a wireless 311 Mbps system. More information is available at www.ceragon.com. 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, except per share data)
PRO-FORMA(a)
For the six months For the three months
ended ended
June 30, June 30,
----------------------- -----------------------
2001 2000 2001 2000
----------- ---------- ----------- ----------
(Unaudited) (Unaudited)
----------------------- -----------------------
Revenues $ 18,436 $ 8,536 $ 5,851 $ 5,338
Cost of revenues 11,018 4,927 3,979 3,048
----------- ---------- ----------- ----------
Gross profit 7,418 3,609 1,872 2,290
----------- ---------- ----------- ----------
Operating expenses
Research and
development 7,586 3,575 3,212 1,974
Less: participation
by the Chief
Scientist of the
Government of
Israel 1,550 1,163 648 533
----------- ---------- ----------- ----------
Research and
development, net 6,036 2,412 2,564 1,441
----------- ---------- ----------- ----------
Marketing and
selling 7,702 3,045 3,784 1,851
General and
administrative 1,954 629 1,013 353
----------- ---------- ----------- ----------
Total operating
expenses 15,692 6,086 7,361 3,645
----------- ---------- ----------- ----------
Operating loss (8,274) (2,477) (5,489) (1,355)
Financing income, net 1,616 197 772 242
----------- ---------- ----------- ----------
Net loss $ (6,658) $ (2,280) $ (4,717) $ (1,113)
=========== ========== =========== ==========
Net loss attributable
to ordinary
shareholders (6,658) (2,280) (4,717) (1,113)
=========== ========== =========== ==========
Basic and diluted net
loss per ordinary
share $ (0.32) $ (0.44) $ (0.23) $ (0.21)
=========== ========== =========== ==========
Weighted average
number of ordinary
shares Outstanding 20,762,526 5,240,750 20,867,621 5,240,750
=========== ========== =========== ==========
(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 six months ended June 30, 2001 exclude one-time
charges of $11.05 million for an inventory write-down presented
in cost of revenues, $2.6 million for doubtful debt presented in
general and administrative expenses, and $4.7 million due to
restructuring plans presented in restructuring costs. The
pro-forma results for the three months ended June 30, 2001
exclude one-time charges of $4.7 million due to restructuring
plans presented in restructuring costs.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the six For the three
months ended months ended
June 30, June 30,
----------------------- -----------------------
2001 2000 2001 2000
(Unaudited) (Unaudited)
----------------------- -----------------------
Revenues $ 18,436 $ 8,536 $ 5,851 $ 5,338
Cost of revenues 22,068 4,927 3,979 3,048
----------- ---------- ----------- ----------
Gross profit
(loss) before
non-cash
compensation
expense (3,632) 3,609 1,872 2,290
Non-cash compensation
expense 224 266 94 171
----------- ---------- ----------- ----------
Gross profit
(loss) (3,856) 3,343 1,778 2,119
----------- ---------- ----------- ----------
Operating expenses
Research and
development, net
of non-cash
compensation
expense of
$1,338, $1,520,
$597, $914 7,586 3,575 3,212 1,974
Less: participation
by the Chief
Scientist of the
Government of
Israel 1,550 1,163 648 533
----------- ---------- ----------- ----------
Research and
development, net 6,036 2,412 2,564 1,441
----------- ---------- ----------- ----------
Marketing and
selling, net of
non-cash
compensation
expense of $1,170,
$1,515, $537, $824 7,702 3,045 3,784 1,851
General and
administrative,
net of non-cash
compensation
expense of $1,055,
$998, $492, $573 4,586 629 1,013 353
Amortization of
deferred
compensation 3,563 4,033 1,626 2,311
Restructuring costs 4,750 - 4,750 -
----------- ---------- ----------- ----------
Total operating
expenses 26,637 10,119 13,737 5,956
----------- ---------- ----------- ----------
Operating loss (30,493) (6,776) (11,959) (3,837)
Financing income, net 1,616 197 772 242
----------- ---------- ----------- ----------
Net loss (28,877) (6,579) (11,187) (3,595)
----------- ---------- ----------- ----------
Dividend related to
convertible
preferred shares - (22,328) - -
----------- ---------- ----------- ----------
Net loss attributable
to ordinary
shareholders $ (28,877) $ (28,907) $ (11,187) $ (3,595)
=========== ========== =========== ==========
Basic and diluted net
loss per ordinary
share $ (1.39) $ (5.52) $ (0.54) $ (0.69)
=========== ========== =========== ==========
Weighted average
number of ordinary
shares Outstanding 20,762,526 5,240,750 20,867,621 5,240,750
=========== ========== =========== ==========
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30 December 31
2001 2000
(Unaudited) (Audited)
----------- -----------
Current assets
Cash and cash equivalents $ 13,385 $ 70,064
Short-term deposits 27,667 10,256
Short-term investments 20,058 --
----------- -----------
61,110 80,320
Trade receivables, net 4,006 12,705
Other receivables 2,841 5,300
Inventories 23,459 22,190
----------- -----------
Total current assets 91,416 120,515
----------- -----------
Property and equipment
Cost 10,596 8,469
Less - accumulated depreciation 2,458 1,455
----------- -----------
8,138 7,014
----------- -----------
Deposits with insurance companies 790 521
----------- -----------
Total assets $ 100,344 $ 128,050
=========== ===========
Current liabilities
Trade payables $ 5,724 $ 12,463
Other payables and accrued expenses 7,302 3,494
----------- -----------
Total current liabilities 13,026 15,957
----------- -----------
Long-term liabilities
Accrued severance pay 1,374 1,025
----------- -----------
Total long-term liabilities 1,374 1,025
----------- -----------
Total liabilities 14,400 16,982
----------- -----------
Commitments
Shareholders' equity
Share capital
Ordinary shares of NIS 0.01 par value:
Authorized - as of December 31, 2000
and June 30, 2001 40,000,000 shares;
issued and outstanding as of
December 31, 2000 and June 30, 2001
20,517,521 and 20,902,921 shares,
respectively 53 52
Additional paid-in capital 169,969 170,348
Deferred compensation (8,100) (12,231)
Accumulated deficit (75,978) (47,101)
----------- -----------
Total shareholders' equity 85,944 111,068
----------- -----------
Total liabilities and shareholders' equity $ 100,344 $ 128,050
=========== ===========
This press release may contain statements concerning Ceragon's future prospects that 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. These statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance 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; and the demand for Ceragon's products and technology. These risks and uncertainties, as well as others, are discussed in greater detail in Ceragon's Annual Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and Ceragon undertakes no commitment to revise or update any forward-looking statement 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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