Ceragon Networks Reports 2021 First Quarter Financial Results

LITTLE FALLS, N.J., May 3, 2021 /PRNewswire/ -- Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the first quarter ended March 31, 2021.

Ira Palti, President & CEO, commented: "2021 has been off to a good start both for the telecom industry in general and for us at Ceragon specifically. The amount of data flowing around the globe has increased at an exponential rate. As Tier-1 and Tier-2 operators step up their efforts to provide enhanced 4G coverage as well as new 5G services, many of them turn to Ceragon."

"In Q1 2021, the accelerated 5G evolution along with the growing OpenRan movement has kept Ceragon's growing suite of innovative solutions in the spotlight. We achieved three new 5G design wins, saw very strong bookings across different regions, and were selected to participate in an OpenRan trial in TIM Brazil. Even though the industry is currently facing component shortages, which might affect our short-term deliveries, the global telecom industry is fast moving into a new era and Ceragon is well prepared to excel in it."

"As the Company's president & CEO for the last sixteen years, I've led the company from a simpler 2G world into today's more complex OpenRan, 5G world. It's with peace of mind and a feeling of accomplishment that I pass the keys of the CEO office to our successful former deputy CEO & CFO Doron Arazi. I'll continue serving Ceragon as vice-chairman of the board starting July."

Primary First Quarter 2021 Financial Results:

Revenues were $68.3 million, up 22.2% from $55.9 million in Q1 2020 and down 7.7% from $74.0 million in Q4 2020. Our revenues varied from region to region and were in line with the effect that COVID has had on local business operations and network build-out plans.

Gross profit was $20.1 million, giving us a gross margin of 29.5%, compared with a gross margin of 25.1% in Q1 2020 and 29.1% in Q4 2020. The relatively low gross margin reflects continued high supply chain costs due to the COVID-19 environment.

Operating income (loss) was $0.4 million compared with operating loss of $(6.0) million for Q1 2020 and $(1.5) million for Q4 2020.

Net loss was $(1.2) million, or $(0.01) per diluted share compared with $(6.9) million, or $(0.09) per diluted share for Q1 2020 and $(6.3) million, or $(0.08) per diluted share for Q4 2020.

Non-GAAP results were as follows: Gross margin was 29.6%, operating profit was $0.7 million, and net loss was $(0.9) million, or $(0.01) per diluted share.

Cash and cash equivalents was $33.0 million at March 31, 2021, compared to $27.1 million at December 31, 2020.

For a reconciliation of GAAP to non-GAAP results, see the attached tables.

Revenue Breakouts by Geography:

Outlook

We continue to target revenue growth in 2021. Although we still expect a slow start for the first half of the year, we continue to expect yearly revenue to be between $275-$295 million. Now all that said, the growing component shortage may have a negative impact on the timeliness of our Q2 and rest-of-the-year deliveries and may lead to a probable push of revenues between quarters until the shortage is resolved.

Conference Call

The Company will host a Zoom web conference today at 9:00a.m. ET to discuss the results, followed by a question and answer session for the investment community.

Investors are invited to register by clicking the following link: https://us02web.zoom.us/webinar/register/WN_ZrHJ225HTJKmGqKKHgWtTA. All relevant information will be sent upon registration.

If you are unable to join us live, a recording of the call will be available on our website at www.ceragon.com within 24 hours after the call.

About Ceragon Networks

Ceragon Networks Ltd. (NASDAQ: CRNT) is the global innovator and leading solutions provider of 5G wireless transport. We help operators and other service providers worldwide increase operational efficiency and enhance end customers' quality of experience with innovative wireless backhaul and fronthaul solutions. Our customers include service providers, public safety organizations, government agencies and utility companies, which use our solutions to deliver 5G & 4G, mission-critical multimedia services and other applications at high reliability and speed.

Ceragon's unique multicore technology and disaggregated approach to wireless transport provides highly reliable, fast to deploy, high-capacity wireless transport for 5G and 4G networks with minimal use of spectrum, power, real estate and labor resources. It enables increased productivity, as well as simple and quick network modernization, positioning Ceragon as a leading solutions provider for the 5G era. We deliver a range of professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 400 service providers, as well as more than 800 private network owners, in more than 150 countries. For more information please visit: www.ceragon.com

Safe Harbor

Ceragon Networks® and FibeAir® are registered trademarks of Ceragon Networks Ltd. in the United States and other countries. CERAGON ® is a trademark of Ceragon Networks Ltd., registered in various countries. Other names mentioned are owned by their respective holders.

This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended, and the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs, expectations and assumptions of Ceragon's management about Ceragon's business, financial condition, results of operations, micro and macro market trends and other issues addressed or reflected therein. Examples of forward-looking statements include: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, growth prospects, product development, financial resources, cost savings and other financial and market matters. You may identify these and other forward-looking statements by the use of words such as "may", "plans", "anticipates", "believes", "estimates", "targets", "expects", "intends", "potential" or the negative of such terms, or other comparable terminology.

Although we believe that the projections reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations therefrom will not be material. Such statements involve risks and uncertainties that may cause future results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, the effects of general economic conditions, the effect of the COVID-19 crisis on the global markets and on the markets in which we operate, including the risk of a continued disruption to our and our customers', providers', business partners and contractors' business and operations as a result of the COVID-19 pandemic effects and the restrictions on operations created thereby, and of an adverse effect on our and our customers' financial performance, cash flow, revenue and financial results, available cash and financing, and our ability to bill and collect amounts due from our customers as a result therefrom; the risk of components shortage due to the global shortage in semiconductors and chipsets, which could cause delays in deliveries of our products and delays in the deployment of wireless communication networks by our customers, slowdowns and other adverse effects on our industry; the risks relating to the concentration of a significant portion of Ceragon's expected business in certain countries and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues; risks associated with any failure to meet our product development timetable; the risk that the rollout of 5G services could take longer or be performed differently than anticipated and such other risks, uncertainties and other factors that could affect our results, as further detailed in Ceragon's most recent Annual Report on Form 20-F and in Ceragon's other filings with the Securities and Exchange Commission.

Such forward-looking statements, including the risks, uncertainties and other factors that could affect our results, represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. Such forward-looking statements do not purport to be predictions of future events or results and there can be no assurance that it will prove to be accurate. Ceragon may elect to update these forward-looking statements at some point in the future but the company specifically disclaims any obligation to do so except as may be required by law.

Ceragon's public filings are available on the Securities and Exchange Commission's website at www.sec.gov and may also be obtained from Ceragon's website at www.ceragon.com.

Investor & Media Contact:
Maya Lustig
Ceragon Networks
Tel. +972-54-677-8100
mayal@ceragon.com

- Tables Follow -

 

March 31,
2021

December 31,
2020

ASSETS

Unaudited

Audited

CURRENT ASSETS:

Cash and cash equivalents

$           33,011

$           27,101

Trade receivables, net

106,712

107,388

Other accounts receivable and prepaid expenses

13,202

14,755

Inventories

48,542

50,627

Total current assets

201,467

199,871

NON-CURRENT ASSETS:

    Deferred tax assets

8,269

8,279

   Severance pay and pension fund

5,899

6,059

   Property and equipment, net

31,063

31,748

   Operating lease right-of-use assets

23,701

6,780

   Intangible assets, net

6,018

6,117

    Other non-current assets

14,681

13,565

Total non-current assets

89,631

72,548

Total assets

$         291,098

$         272,419

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables

$        61,813

$        63,722

Deferred revenues

3,489

3,492

Short-term loans

11,979

5,979

Operating lease liabilities

4,752

3,183

Other accounts payable and accrued expenses

20,480

24,048

Total current liabilities

102,513

100,424

LONG-TERM LIABILITIES:

Accrued severance pay and pension

11,238

11,601

Deferred revenues

9,035

7,495

Operating lease liabilities

19,006

3,840

Other long-term payables

2,909

2,933

Total long-term liabilities

42,188

25,869

SHAREHOLDERS' EQUITY:

Share capital:

    Ordinary shares

223

218

Additional paid-in capital

424,993

420,958

Treasury shares at cost

(20,091)

(20,091)

Other comprehensive loss

(10,664)

(8,068)

Accumulated deficits

(248,064)

(246,891)

Total shareholders' equity

146,397

146,126

Total liabilities and shareholders' equity

$       291,098

$        272,419

SOURCE Ceragon Networks Ltd