Ceragon Networks Reports Second Quarter 2002 Financial Results.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)--July 25, 2002 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(TM) Ltd. (Nasdaq:CRNT CRNT Current ), www.ceragon.com, a global provider of high-capacity broadband wireless See wireless broadband. systems, today reported results for the second quarter of 2002, which ended June June: see month. 30, 2002. Revenues for the second quarter of 2002 were $4.0 million, as compared to $3.3 million for the first quarter of 2002, an increase of over 20%. Pro-forma gross profit (a) for the second quarter was $1.2 million, or 29% of revenues, up from a pro-forma gross profit of $0.8 million, or 24.6% of revenues, in the first quarter of 2002. Pro-forma net loss for the second quarter of 2002 was $(3.0) million, or $(0.14) pro-forma net loss per ordinary share, as compared to $(3.4) million, or $(0.15) pro-forma net loss per ordinary share, for the first quarter of 2002. The company ended the second quarter of 2002 with $48.0 million in cash and liquid investments. For an explanation of pro-forma results see the notes at (a) below. "This past quarters' results show consistent improvement, and our visibility has increased," 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. "As the market fluctuates, our strategy at Ceragon remains steady -- to lay a solid foundation for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. company growth by focusing on cellular carriers, geographic diversity and product innovation." Ceragon recently announced a new multi-year contract with Cellcom Cellcom could be referring to the following:
emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and Asia Pacific regions. Ceragon strengthened its relationships with carriers in 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). , the Middle East,
and Africa, who, collectively, generated the majority of revenues.A conference call discussing Ceragon's results for the second quarter of 2002 will take place today, July July: see month. 25, 2002, at 11:00 a.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 ). Details can be found on Ceragon's website at www.ceragon.com. A replay of the call will be accessible 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. The replay will be available through July 29, 2002. (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. In addition, the pro-forma results for the three months ended June 30, 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 due to 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). plans presented in restructuring costs. The pro-forma results for the six months ended June 30, 2001 exclude one-time charges of $11.0 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 year ended December December: see month. 31, 2001 exclude one-time charges of $28.8 million for an inventory write-down and a fixed asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. 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. About Ceragon Networks Ceragon Networks Ltd. (NASDAQ:CRNT), a pacesetter in broadband wireless networking systems, enables the rapid 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. deployment of high-capacity network 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. . Ceragon's FibeAir(TM) product family was uniquely designed for cellular operators, enterprises and 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 progressively build networks to meet the growing demand for value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: broadband services See broadband and broadband service provider. . The modular FibeAir system operates across multiple frequencies from 7 to 38 GHz and supports integrated high-capacity services over IP, SONET/SDH (Synchronous Optical NETwork/Synchronous Digital Hierarchy) A common reference to SONET networks worldwide. See SONET. and ATM networks. Ceragon's equipment complies 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 is installed with over 100 customers in more than 35 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. Recently, Ceragon announced another industry first -- a high capacity fixed wireless system with a built-in built-in - (Or "primitive") A built-in function or operator is one provided by the lowest level of a language implementation. This usually means it is not possible (or efficient) to express it in the language itself. SONET/SDH add-drop multiplexer Not to be confused with optical add-drop multiplexer. An add-drop multiplexer (ADM) is an important element of optical fiber networks. A multiplexer combines, or multiplexes, several lower-bandwidth streams of data into a single beam of light. (ADM See add/drop multiplexer. (language) ADM - A picture query language, extension of Sequel2. ["An Image-Oriented Database System", Y. Takao et al, in Database Techniques for Pictorial Applications, A. Blaser ed, pp. 527-538]. ). More information is available at www.ceragon.com. Ceragon Networks(TM), Ceragon(TM), FibeAir(TM), ConfigAir(TM), CeraView(TM), CeraMon(TM), EtherAir(TM), QuickAir(TM), QuickAir Partner Program(TM), QuickAir Partner Certification Program(TM), QuickAir Partner Zone(TM), EncryptAir(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
(U.S. dollars in thousands, except share and per share data)
PRO-FORMA(a)
Three months ended Six months ended Year ended
June 30, June 30, Dec. 31,
------------------- ------------------- ----------
2002 2001 2002 2001 2001
-------- -------- -------- -------- ----------
Unaudited Audited
----------------------------------------- ----------
Revenues $ 3,994 $ 5,851 $ 7,276 $ 18,436 $ 24,852
Cost of revenues 2,834 3,979 5,310 11,018 16,451
-------- -------- -------- -------- ----------
Gross profit 1,160 1,872 1,966 7,418 8,401
-------- -------- -------- -------- ----------
Operating expenses:
Research and
development 2,311 3,212 4,496 7,586 12,967
Less:
participation by
the Chief Scientist
of the Government
of Israel 490 648 846 1,550 2,660
-------- -------- -------- -------- ----------
Research and
development, net 1,821 2,564 3,650 6,036 10,307
Sales and
marketing 2,312 3,784 4,584 7,702 11,924
General and
administrative 542 1,013 1,041 1,954 3,138
-------- -------- -------- -------- ----------
Total operating
expenses 4,675 7,361 9,275 15,692 25,369
-------- -------- -------- -------- ----------
Operating loss (3,515) (5,489) (7,309) (8,274) (16,968)
Financial
income, net 479 772 867 1,616 2,769
-------- -------- -------- -------- ----------
Net loss $ (3,036) $ (4,717) $ (6,442) $ (6,658) $ (14,199)
========= ========= ========= ========= ==========
Basic and
diluted net
loss per
share $ (0.14) $ (0.23) $ (0.29) $ (0.32) $ (0.67)
======== ======== ======== ======== ==========
Weighted
average
number of
shares used
in computing
basic and
diluted net
loss per
share 22,350,396 20,867,621 22,289,907 20,762,526 21,099,336
========== ========== ========== ========== ==========
(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. In
addition, 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. The pro-forma results for the six
months ended June 30, 2001 exclude one-time charges of $11.0 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 year ended December
31, 2001 exclude one-time charges of $28.8 million for an inventory
write-down and a fixed asset impairment 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three months ended Six months ended Year ended
June 30, June 30, Dec. 31,
------------------- ------------------- ----------
2002 2001 2002 2001 2001
-------- -------- -------- -------- ----------
Unaudited Audited
----------------------------------------- ----------
Revenues $ 3,994 $ 5,851 $ 7,276 $ 18,436 $ 24,852
Cost of revenues 2,834 3,979 5,310 22,068 45,282
-------- -------- -------- -------- ----------
Gross profit
(loss) before
non-cash stock
compensation 1,160 1,872 1,966 (3,632) (20,430)
Non-cash stock
compensation 50 94 118 224 400
-------- -------- -------- -------- ----------
Gross profit (loss) 1,110 1,778 1,848 (3,856) (20,830)
Operating expenses:
Research and
development, net
of non-cash stock
compensation
expense of $250,
$597, $563,
$1,338, $2,248 2,311 3,212 4,496 7,586 12,967
Less:
participation by
the Chief Scientist
of the Government
of Israel 490 648 846 1,550 2,660
-------- -------- -------- -------- ----------
Research and
development, net 1,821 2,564 3,650 6,036 10,307
Sales and
marketing, net of
non-cash stock
compensation
expense of $293,
$537, $624,
$1,170, $1,984 2,312 3,784 4,584 7,702 11,924
General and
administrative,
net of non-cash
stock
compensation
expense of $190,
$492, $415,
$1,055, $1,799 542 1,013 1,041 4,586 5,770
Amortization of
deferred stock
compensation 733 1,626 1,602 3,563 6,031
Restructuring costs - 4,750 - 4,750 4,750
-------- -------- -------- -------- ----------
Total operating
expenses 5,408 13,737 10,877 26,637 38,782
-------- -------- -------- -------- ----------
Operating loss (4,298) (11,959) (9,029) (30,493) (59,612)
Financial
income, net 479 772 867 1,616 2,769
-------- -------- -------- -------- ----------
Net loss $ (3,819) $ (11,187) $ (8,162) $ (28,877) $ (56,843)
========= ========== ========= ========== ==========
Basic and diluted
net loss
per share $ (0.17) $ (0.54) $ (0.37) $ (1.39) $ (2.69)
======== ======== ======== ======== ========
Weighted
average
number of
shares
used in
computing
basic and
diluted
net loss
per share 22,350,396 20,867,621 22,289,907 20,762,526 21,099,336
========== ========== ========== ========== ==========
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share data)
June 30, Dec. 31,
2002 2001
--------- ---------
Unaudited Audited
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,375 $ 6,421
Short-term bank deposits 18,342 26,741
Corporate bonds 7,090 19,813
Trade receivables, net 2,614 2,822
Other accounts receivable and prepaid expenses 2,868 2,143
Inventories 6,656 7,377
--------- ---------
Total current assets 43,945 65,317
--------- ---------
LONG-TERM INVESTMENTS:
Long-term corporate bonds 8,441 746
Long-term bank deposits 7,787 -
Severance pay funds 1,050 930
--------- ---------
Total long-term investments 17,278 1,676
--------- ---------
PROPERTY AND EQUIPMENT, NET 4,247 5,093
--------- ---------
Total assets $ 65,470 $ 72,086
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 5,325 $ 5,040
Other accounts payable and accrued expenses 4,327 4,916
--------- ---------
Total current liabilities 9,652 9,956
--------- ---------
ACCRUED SEVERANCE PAY 1,608 1,511
--------- ---------
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares of NIS 0.01 par value:
Authorized: 40,000,000 shares as of
December 31, 2001 and June 30, 2002,
respectively; issued and outstanding:
22,165,196 and 22,391,096 as of
December 31, 2001 and June 30, 2002,
respectively 56 56
Additional paid-in capital 169,350 169,355
Deferred stock compensation (3,090) (4,848)
Accumulated deficit (112,106) (103,944)
--------- ---------
Total shareholders' equity 54,210 60,619
--------- ---------
Total liabilities and shareholders' equity $ 65,470 $ 72,086
========= =========
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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