CERAGON NETWORKS LTD.
(Translation of registrant’s name into English)
|
Plot 300, Nitzba Citi, Rosh Ha’Ayin, Israel, 4810002
(Address of principal executive offices)
|
|
CERAGON NETWORKS LTD.
|
Date: November 7, 2022
|
By: /s/ Ronen Stein
|
|
Name: Ronen Stein
Title: Chief Financial Officer |
Exhibit
|
Description
|
• |
Revenues of $78.6 million
|
• |
Gross margin of 35.3% on a GAAP basis, or 35.5% on a non-GAAP basis
|
• |
Operating Income of $1.3 million on a GAAP basis, or $6.4 million on a non-GAAP basis
|
• |
EPS of $(0.01) per diluted share on a GAAP basis, or $0.05 per diluted share on a non-GAAP basis
|
• |
Record quarter in terms of bookings, the highest since the beginning of 2017, mainly from India and North America
|
• |
North America: Exceptionally strong quarter in terms of bookings and revenue; large long-standing customer becomes the Company’s second
customer above 10%.
|
• |
India: Strong bookings; strongest region in terms of revenues; first orders for E-band and vendor agnostic multi band product
|
• |
APAC: A large multi-year contract signed with a leading Tier 1 Pacific Rim operator, valued at a potential of over $44 million over 3 years
|
Q3 2022
|
|
India
|
28%
|
North America
|
27%
|
Latin America
|
17%
|
Europe
|
13%
|
APAC
|
10%
|
Africa
|
5%
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Revenues
|
$
|
78,649
|
$
|
76,115
|
$
|
219,642
|
$
|
213,006
|
||||||||
Cost of revenues
|
50,861
|
52,600
|
151,111
|
147,460
|
||||||||||||
Gross profit
|
27,788
|
23,515
|
68,531
|
65,546
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
7,318
|
6,713
|
21,610
|
21,678
|
||||||||||||
Sales and Marketing
|
8,663
|
8,550
|
26,797
|
24,483
|
||||||||||||
General and administrative
|
6,571
|
5,316
|
16,469
|
15,606
|
||||||||||||
Other operating expenses (*)
|
3,971
|
-
|
3,971
|
-
|
||||||||||||
Total operating expenses
|
$
|
26,523
|
$
|
20,579
|
$
|
68,847
|
$
|
61,767
|
||||||||
Operating income (loss)
|
1,265
|
2,936
|
(316
|
)
|
3,779
|
|||||||||||
Financial expenses and others, net
|
1,778
|
2,375
|
3,294
|
5,228
|
||||||||||||
Income (loss) before taxes
|
(513
|
)
|
561
|
(3,610
|
)
|
(1,449
|
)
|
|||||||||
Taxes on income
|
350
|
295
|
1,061
|
1,167
|
||||||||||||
Net income (loss)
|
$
|
(863
|
)
|
$
|
266
|
$
|
(4,671
|
)
|
$
|
(2,616
|
)
|
|||||
Basic net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
|||||
Diluted net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
(0.06
|
) |
$
|
(0.03
|
)
|
|||||
Weighted average number of shares used in computing basic net income (loss) per share
|
84,200,177
|
83,717,482
|
84,060,674
|
83,245,798
|
||||||||||||
Weighted average number of shares used in computing diluted net income (loss) per share
|
84,200,177
|
84,636,726
|
84,060,674
|
83,245,798
|
September 30,
2022
|
December 31,
2021
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
25,964
|
$
|
17,079
|
||||
Trade receivables, net
|
109,969
|
107,826
|
||||||
Other accounts receivable and prepaid expenses
|
16,573
|
17,179
|
||||||
Inventories
|
64,227
|
61,398
|
||||||
Total current assets
|
216,733
|
203,482
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Trade receivables, net
|
5,902
|
10,484
|
||||||
Severance pay and pension fund
|
4,969
|
5,648
|
||||||
Property and equipment, net
|
30,160
|
29,383
|
||||||
Operating lease right-of-use assets
|
18,340
|
20,233
|
||||||
Intangible assets, net
|
7,380
|
6,274
|
||||||
Other non-current assets
|
18,852
|
17,059
|
||||||
Total non-current assets
|
85,603
|
89,081
|
||||||
Total assets
|
$
|
302,336
|
$
|
292,563
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Trade payables
|
$
|
72,076
|
$
|
69,436
|
||||
Deferred revenues
|
3,499
|
3,384
|
||||||
Short-term loans
|
29,900
|
14,800
|
||||||
Operating lease liabilities
|
3,795
|
4,359
|
||||||
Other accounts payable and accrued expenses
|
24,128
|
23,704
|
||||||
Total current liabilities
|
133,398
|
115,683
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Accrued severance pay and pension
|
9,401
|
10,799
|
||||||
Deferred revenues
|
10,895
|
9,275
|
||||||
Other long-term payables
|
2,436
|
2,445
|
||||||
Operating lease liabilities
|
13,449
|
17,210
|
||||||
Total long-term liabilities
|
36,181
|
39,729
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital:
|
||||||||
Ordinary shares
|
224
|
224
|
||||||
Additional paid-in capital
|
431,256
|
428,244
|
||||||
Treasury shares at cost
|
(20,091
|
)
|
(20,091
|
)
|
||||
Other comprehensive loss
|
(12,242
|
)
|
(9,507
|
)
|
||||
Accumulated deficits
|
(266,390
|
)
|
(261,719
|
)
|
||||
Total shareholders' equity
|
132,757
|
137,151
|
||||||
Total liabilities and shareholders' equity
|
$
|
302,336
|
$
|
292,563
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
Cash flow from operating activities:
|
||||||||||||||||
Net income (loss)
|
$
|
(863
|
)
|
$
|
266
|
$
|
(4,671
|
)
|
$
|
(2,616
|
)
|
|||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation and amortization
|
2,643
|
2,959
|
8,418
|
8,788
|
||||||||||||
Loss from sale of property and equipment, net
|
-
|
6
|
20
|
73
|
||||||||||||
Stock-based compensation expense
|
1,167
|
1,034
|
2,602
|
1,671
|
||||||||||||
Increase (decrease) in accrued severance pay and pensions, net
|
(321
|
)
|
220
|
(690
|
)
|
(284
|
)
|
|||||||||
Decrease (increase) in trade receivables, net
|
6,659
|
(2,825
|
)
|
2,486
|
(2,588
|
)
|
||||||||||
Decrease (increase) in other accounts receivable and prepaid expenses (including other long term assets)
|
1,297
|
(1,848
|
)
|
(1,759
|
)
|
(7,720
|
)
|
|||||||||
Decrease in operating lease right-of-use assets
|
853
|
945
|
2,726
|
3,393
|
||||||||||||
Increase in inventory, net of write off
|
(3,759
|
)
|
(1,389
|
)
|
(3,310
|
)
|
(3,435
|
)
|
||||||||
Increase in deferred tax asset, net
|
-
|
(139
|
)
|
-
|
(264
|
)
|
||||||||||
Increase (decrease) in trade payables
|
1,834
|
(2,402
|
)
|
3,173
|
(265
|
)
|
||||||||||
Increase (decrease) in other accounts payable and accrued expenses (including other long term liabilities)
|
(258
|
)
|
3,460
|
(1,964
|
)
|
(186
|
)
|
|||||||||
Decrease in operating lease liability
|
(1,087
|
)
|
(843
|
)
|
(5,158
|
)
|
(3,042
|
)
|
||||||||
Increase (decrease) in deferred revenues
|
432
|
(111
|
)
|
1,735
|
1,196
|
|||||||||||
Net cash provided by (used in) operating activities
|
$
|
8,597
|
$
|
(667
|
)
|
$
|
3,608
|
$
|
(5,279
|
)
|
||||||
Cash flow from investing activities:
|
||||||||||||||||
Purchase of property and equipment, net
|
(3,664
|
)
|
(2,316
|
)
|
(9,032
|
)
|
(6,247
|
)
|
||||||||
Proceeds from sale of property and equipment, net
|
-
|
-
|
-
|
200
|
||||||||||||
Purchase of intangible assets
|
(823
|
)
|
(20
|
)
|
(1,260
|
)
|
(20
|
)
|
||||||||
Net cash used in investing activities
|
$
|
(4,487
|
)
|
$
|
(2,336
|
)
|
$
|
(10,292
|
)
|
$
|
(6,067
|
)
|
||||
Cash flow from financing activities:
|
||||||||||||||||
Proceeds from exercise of options
|
297
|
730
|
410
|
4,688
|
||||||||||||
Proceeds from (repayment of) bank credits and loans, net
|
(2,000
|
)
|
900
|
15,100
|
6,900
|
|||||||||||
Net cash provided by (used in) financing activities
|
$
|
(1,703
|
)
|
$
|
1,630
|
$
|
15,510
|
$
|
11,588
|
|||||||
Translation adjustments on cash and cash equivalents
|
$
|
(35
|
)
|
$
|
(62
|
)
|
$
|
59
|
$
|
(108
|
)
|
|||||
Increase (decrease) in cash and cash equivalents
|
$
|
2,372
|
$
|
(1,435
|
)
|
$
|
8,885
|
$
|
134
|
|||||||
Cash and cash equivalents at the beginning of the period
|
23,592
|
28,670
|
17,079
|
27,101
|
||||||||||||
Cash and cash equivalents at the end of the period
|
$
|
25,964
|
$
|
27,235
|
$
|
25,964
|
$
|
27,235
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
|
2022 | 2021 | 2022 |
2021
|
||||||||||||
GAAP cost of revenues
|
$
|
50,861
|
$
|
52,600
|
$
|
151,111
|
$
|
147,460
|
||||||||
Stock based compensation expenses
|
(161
|
)
|
(89
|
)
|
(418
|
)
|
(160
|
)
|
||||||||
Paycheck protection program
|
-
|
-
|
-
|
306
|
||||||||||||
Changes in indirect tax positions
|
(1
|
)
|
(2
|
)
|
(2
|
)
|
(5
|
)
|
||||||||
Non-GAAP cost of revenues
|
$
|
50,699
|
$
|
52,509
|
$
|
150,691
|
$
|
147,601
|
||||||||
GAAP gross profit
|
$
|
27,788
|
$
|
23,515
|
$
|
68,531
|
$
|
65,546
|
||||||||
Gross profit adjustments
|
162
|
91
|
420
|
(141
|
)
|
|||||||||||
Non-GAAP gross profit
|
$
|
27,950
|
$
|
23,606
|
$
|
68,951
|
$
|
65,405
|
||||||||
GAAP Research and development expenses
|
$
|
7,318
|
$
|
6,713
|
$
|
21,610
|
$
|
21,678
|
||||||||
Stock based compensation expenses
|
(168
|
)
|
(73
|
)
|
(188
|
)
|
(186
|
)
|
||||||||
Non-GAAP Research and development expenses
|
$
|
7,150
|
$
|
6,640
|
$
|
21,422
|
$
|
21,492
|
||||||||
GAAP Sales and Marketing expenses
|
$
|
8,663
|
$
|
8,550
|
$
|
26,797
|
$
|
24,483
|
||||||||
Stock based compensation expenses
|
(383
|
)
|
(201
|
)
|
(962
|
)
|
(355
|
)
|
||||||||
Paycheck protection program
|
-
|
-
|
-
|
673
|
||||||||||||
Non-GAAP Sales and Marketing expenses
|
$
|
8,280
|
$
|
8,349
|
$
|
25,835
|
$
|
24,801
|
||||||||
GAAP General and Administrative expenses
|
$
|
6,571
|
$
|
5,316
|
$
|
16,469
|
$
|
15,606
|
||||||||
Retired CEO compensation
|
-
|
-
|
96
|
(810
|
)
|
|||||||||||
Stock based compensation expenses
|
(455
|
)
|
(671
|
)
|
(1,034
|
)
|
(970
|
)
|
||||||||
Non-GAAP General and Administrative expenses
|
$
|
6,116
|
$
|
4,645
|
$
|
15,531
|
$
|
13,826
|
||||||||
GAAP Other operating expenses
|
3,971
|
-
|
3,971
|
-
|
||||||||||||
Hostile attempt related costs
|
(3,971
|
)
|
-
|
(3,971
|
)
|
-
|
||||||||||
Non-GAAP Other operating expenses
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
GAAP operating income (loss)
|
$
|
1,265
|
$
|
2,936
|
$
|
(316
|
)
|
$
|
3,779
|
|||||||
Stock based compensation expenses
|
1,167
|
1,034
|
2,602
|
1,671
|
||||||||||||
Changes in indirect tax positions
|
1
|
2
|
2
|
5
|
||||||||||||
Retired CEO compensation
|
-
|
-
|
(96
|
)
|
810
|
|||||||||||
Paycheck protection program
|
-
|
-
|
-
|
(979
|
)
|
|||||||||||
Hostile attempt related costs
|
3,971
|
-
|
3,971
|
-
|
||||||||||||
Non-GAAP operating income (loss)
|
$
|
6,404
|
$
|
3,972
|
$
|
6,163
|
$
|
5,286
|
||||||||
GAAP financial expenses and others, net
|
$
|
1,778
|
$
|
2,375
|
$
|
3,294
|
$
|
5,228
|
||||||||
Leases – financial income (expenses)
|
233
|
(102
|
)
|
2,432
|
(351
|
)
|
||||||||||
Non-GAAP financial expenses and others, net
|
$
|
2,011
|
$
|
2,273
|
$
|
5,726
|
$
|
4,877
|
||||||||
GAAP Tax expenses
|
$
|
350
|
$
|
295
|
$
|
1,061
|
$
|
1,167
|
||||||||
Non cash tax adjustments
|
(81
|
)
|
53
|
(427
|
)
|
(52
|
)
|
|||||||||
Non-GAAP Tax expenses
|
$
|
269
|
$
|
348
|
$
|
634
|
$
|
1,115
|
Three months ended
September 30, |
Nine months ended
September 30,
|
|||||||||||||||
2022
|
2021
|
2022
|
2021
|
|||||||||||||
GAAP net income (loss)
|
$
|
(863
|
)
|
$
|
266
|
$
|
(4,671
|
)
|
$
|
(2,616
|
)
|
|||||
Stock based compensation Expenses
|
1,167
|
1,034
|
2,602
|
1,671
|
||||||||||||
Changes in indirect tax positions
|
1
|
2
|
2
|
5
|
||||||||||||
Leases – financial expenses (income)
|
(233
|
)
|
102
|
(2,432
|
)
|
351
|
||||||||||
Paycheck protection program
|
-
|
-
|
-
|
(979
|
)
|
|||||||||||
Retired CEO compensation
|
-
|
-
|
(96
|
)
|
810
|
|||||||||||
Hostile attempt related costs
|
3,971
|
-
|
3,971
|
-
|
||||||||||||
Non-cash tax adjustments
|
81
|
(53
|
)
|
427
|
52
|
|||||||||||
Non-GAAP net income (loss)
|
$
|
4,124
|
$
|
1,351
|
$
|
(197
|
) |
$
|
(706
|
)
|
||||||
GAAP basic net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
|||||
GAAP diluted net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
(0.06
|
)
|
$
|
(0.03
|
)
|
|||||
Non-GAAP basic and diluted net income (loss) per share
|
$
|
0.05
|
$
|
0.02
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
||||||
Weighted average number of shares used in computing GAAP basic net income (loss) per share
|
84,200,177
|
83,717,482
|
84,060,674
|
83,245,798
|
||||||||||||
Weighted average number of shares used in computing GAAP diluted net income (loss) per share
|
84,200,177
|
84,636,726
|
84,060,674
|
83,245,798
|
||||||||||||
Weighted average number of shares used in computing Non-GAAP diluted net income (loss) per share
|
85,970,107
|
85,270,955
|
84,060,674
|
83,245,798
|