Paramus, New Jersey, February 14, 2013 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the fourth quarter and full year of 2012 which ended December 31, 2012.
Fourth quarter 2012 results:
Revenues for the fourth quarter of 2012 were $106.8 million.
Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the fourth quarter of 2012 was ($8.4) million or $(0.23) per basic share and diluted share, compared to net loss of $(8.2) million in the fourth quarter of 2011, or $(0.23) per basic share and diluted share.
On a non-GAAP basis, excluding (a) $1.2 million of equity-based compensation expenses, (b) $0.9 million amortization of intangible assets, (c) $0.1 million inventory step up related to the Nera acquisition, (d) $6.7 million restructuring and other charges related to reduction in workforce (e) $(0.1) million of changes in pre-acquisition indirect tax positions, net income for the fourth quarter was $0.4 million, or $0.01 per basic share and diluted share. Non-GAAP net income for the fourth quarter of 2011 was $2.3 million, or $0.06 per basic share and diluted share. (Please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP.)
Gross margin on a GAAP basis in the fourth quarter of 2012 was 32.8% of revenues. Gross margin on a non-GAAP basis in the fourth quarter was 33.3% of revenues.
Operating loss on a GAAP basis in the fourth quarter of 2012 was ($7.1) million. On a non-GAAP basis operating income in the fourth quarter of 2012 was $1.8 million.
Cash and cash investments at the end of the quarter were $51.6 million.
“Our revenues in Q4 were within the range of our guidance and our book-to-bill ratio was above 1,” said Ira Palti, President and CEO of Ceragon. “As expected, we generated substantial positive cash flow from operations during the quarter.”
“We achieved a number of important milestones during 2012 that will contribute to improving profitability. After a complete transition of all customers to our short-haul solution and the completion of our program to reduce product cost of the long-haul product, we are poised to achieve further improvement in gross margin. We also increased our market share, becoming the clear #1 in the long haul business and added several new Tier 1 customers while continuing to penetrate others. We recently introduced a new premium solution, the FibeAir IP-20C that could begin to contribute to revenues toward the end of the year, and the expense reduction initiatives implemented during Q4positions us to achieve significant operating leverage once top line growth resumes,” concluded Mr. Palti.
Supplemental quarterly revenue breakouts:
Geographical breakdown, fourth quarter of 2012:
- Europe: 25%
- Africa: 6%
- North America: 8%
- Latin America: 32%
- India: 7%
- APAC: 22%
Full Year 2012 Results
As previously announced, in late December 2012, management learned that a major customer was requiring additional acceptance procedures and documentation for part of the equipment it had purchased from Ceragon and previously accepted. As a result, the Company has deferred a portion of revenues previously recognized in 2012 related to such equipment until the additional acceptance procedures are completed, currently expected in 2013. This deferral of revenue recognition also impacted the recognition of the related costs of revenues and expenses, but had no impact on operating cash flow. Accordingly, adjustments have been made to our financial results for the first three quarters of fiscal 2012, which are described in the supplemental tables on page 10 of this press release. All comparative information in this release is on an adjusted basis.
Revenues for the full year of 2012 were $446.7 million, up 0.3% from $445.3 million in 2011. Net loss on a GAAP basis for 2012 was $(23.4) million or $(0.64) per basic share and diluted share. Net loss for the year 2011 was $(53.7) million or $(1.49) per basic share and diluted share.
On a non-GAAP basis, net income for 2012, excluding (a) $5.5 million of equity-based compensation expenses, (b) $3.5 million amortization of intangible assets, (c) $4.5 million inventory step up related to the Nera acquisition, (d) $6.7 million restructuring and other charges related to reduction in workforce (e) $1.0 million integration plan related costs and (f) $2.3 million of changes in pre-acquisition indirect tax positions, was $0.1 million or $0.002 per basic share and diluted share. Net income for the year 2011, was $0.4 million, or $0.01 per basic share and diluted share.
A conference call will follow, beginning at 9:00 a.m. EST. Investors are invited to join the Company’s teleconference by calling USA: (800) 611-1147 or International: +1 (612) 332-0630, from 8:50 a.m. EST. The call-in lines will be available on a first-come, first-serve basis.
Investors can also listen to the call live via the Internet by accessing Ceragon Networks’ website at the investors’ page: https://www.ceragon.com/investors/events selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: USA: (800) 475-6701 or International +1 (320) 365-3844 Access Code: 280782. A replay of both the call and the webcast will be available through March 14, 2013.
