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Ceragon Networks Reports Third Quarter 2011 Financial Results

Stocks in this article: CRNT

PARAMUS, New Jersey, November 7, 2011 /PRNewswire/ --

Ceragon Networks Ltd. (NASDAQ: CRNT), the premier wireless backhaul specialist today reported results for the third quarter which ended September 30, 2011.

Revenues for the third quarter of 2011 reached a record of $116.1 million, up 86% from $62.3 million for the third quarter of 2010, and up 5% from $110.4 million in the second quarter of 2011.

Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the third quarter of 2011 was ($6.7) million or ($0.19) per basic share and diluted share, compared to net income of $4.6 million in the third quarter of 2010, or $0.13 per basic share and diluted share.

On a non-GAAP basis, net income for the third quarter, excluding (a) $1.7 million of equity-based compensation expenses, and (b) $5.7 million charges related to the Nera acquisition and integration plan, was $595,000, or $0.02 per basic share and diluted share. Non-GAAP net income for the third quarter of 2010 was $5.5 million, or $0.16 and $0.15 per basic and diluted share, respectively (please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP).

Gross margin on a GAAP basis in the third quarter of 2011 was 29.7% of revenues, compared to GAAP gross margin of 21.4% in the second quarter of 2011. Gross margin on a non-GAAP basis was 32.3% of revenues, compared to non-GAAP gross margin of 31.9% in the second quarter of 2011.

Operating loss on a GAAP basis in the third quarter of 2011 was ($5.8) million compared to GAAP operating loss of ($16.2) million in the second quarter of 2011. On a non-GAAP basis operating income was $1.6 million, compared to non-GAAP operating loss of ($470,000) in the second quarter of 2011.

Cash and cash investments at the end of the quarter were $45.9 million.

"We are pleased to report another quarter of excellent progress with the integration leading to a sequential increase in revenues,  improved gross margin and profitability," said Ira Palti, President and CEO of Ceragon. "Business remains good with our book-to-bill ratio for the first nine months of 2011 above one," continued Mr. Palti. "We expect to continue growing revenues, probably at a slower pace than originally expected because we cannot ignore the macro economic uncertainty and the issues in India affecting order patterns. Our plan to migrate customers to lower-cost higher functionality and capacity products is proceeding smoothly, and we continue to expect we will reach our gross margin target of the mid-30s by the end of next year.  Given the current level of visibility, we believe targeting a non-GAAP operating margin of 8%-9% by the end of 2012 is realistic."

Supplemental revenue breakouts:

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