FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

REPORT OF FOREIGN ISSUER

Pursuant to Section 13a-16 or 15d-16 of the
Securities Exchange Act of 1934

For the month of August 2019
 

CERAGON NETWORKS LTD.


(Translation of registrant’s name into English)

24 Raoul Wallenberg Street, Tel Aviv 69719, Israel


(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒  Form 40-F ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registration in connection with Rule 12g3(b): 82 - _________________


Signature

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


CERAGON NETWORKS LTD.


Date: August 12, 2019

By: /s/ Ran Vered

Name: Ran Vered
Title: Chief Financial Officer


Exhibit Description

Exhibit A –  CERAGON NETWORKS REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS

 
- 2 -


Exhibit A

Ceragon Networks Reports Second Quarter 2019 Financial Results

August 12, 2019

CERAGON NETWORKS REPORTS SECOND QUARTER 2019
FINANCIAL RESULTS

Little Falls, New Jersey, August 12, 2019 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the second quarter which ended June 30, 2019.
 
Second Quarter 2019 Highlights:
 
Revenues - $73.0 million, down 17.4% from the second quarter of 2018, and up 5.5% from the first quarter of 2019.
 
Gross margin – 36.1%, compared to 32.5% in the second quarter of 2018 and 35.6% in the first quarter of 2019.
 
Operating income - $4.1 million, compared to $6.4 million in the second quarter of 2018, and $3.2 million in the first quarter of 2019.
 
Net income - $0.8 million, or $0.01 per diluted share for the second quarter of 2019, compared to $3.2 million, or $0.04 per diluted share, in the second quarter of 2018. Net income for the first quarter of 2019 was $0.8 million, or $0.01 per diluted share.
 
Non-GAAP results – Gross margin was 36.1%, operating income was $4.8 million, and net income was $2.5 million, or $0.03 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
 
Cash and cash equivalents - $29.0 million at June 30, 2019, compared to $29.8 million at March 31, 2019.
 
“Growth in several regions accounted for the sequential increase in revenue during the second quarter, although the overall revenue level continued to reflect the delay in receiving orders from our customers in India,” said Ira Palti, president and CEO of Ceragon. “We are pleased to report that, during Q2, we added new design wins for 5G in North America, Europe, and Asia Pacific which we expect to begin contributing to revenue during the second half of next year.
 
“Excluding India, revenue from other regions increased substantially in the first half of 2019 compared to the first half of 2018, and we expect to see this trend continue. Looking to the second half of 2019, it now appears that our revenue from India will be affected not only by the order delays but also by a slowdown in the pace of deployment activity, preventing us from reaching our net income goal and causing net income for 2019 to decline compared to 2018,” Mr. Palti explained.


 
Supplemental geographical breakdown of revenue for the second quarter of 2019:
 
•          Europe:
13%
•          Africa:
11%
•          North America:
20%
•          Latin America:
28%
•          India:
10%
•          APAC:
18%
 
A conference call to discuss the results will begin at 9:00 a.m. EDT. Investors are invited to join the Company’s teleconference by calling USA: (800) 230-1085 or International: +1 (612) 288-0340, from 8:50 a.m. EDT. 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/webcasts, 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: 469750. A replay of both the call and the webcast will be available through September 12, 2019.
 
About Ceragon Networks Ltd.
 
Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless backhaul specialist. We help operators and other service providers worldwide smoothly evolve their networks towards 5G, while increasing operational efficiency and enhancing end customers’ quality of experience, with innovative wireless backhaul solutions. Our customers include wireless service providers, public safety organizations, government agencies and utility companies, that use our solutions to deliver mission-critical multimedia services and other applications at high reliability and speed. Ceragon’s unique multicore technology and wireless backhaul solutions provide highly reliable, 5G high-capacity connectivity with minimal use of spectrum, power and other resources. Our solutions enable increased productivity, as well as simple and quick network modernization. We deliver a range of professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Ceragon’s solutions are deployed by more than 460 service providers, as well as hundreds of private network owners, in more than 130 countries. 

2

 
Join the Discussion
     

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 concerning Ceragon's future prospects that are "forward-looking statements" as defined in 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. 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 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. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the  risks relating to the concentration of a significant portion of Ceragon's expected business in certain geographic regions and particularly in India, where a small number of customers are expected to represent a significant portion of our revenues, including the risks of deviations from our expectations of timing and size of orders from these customers; the risk that the current slowdown in revenue from India could extend for a longer period than anticipated: risks associated with any failure to effectively compete with other wireless equipment providers; the risk that the rollout of 5G services could take longer than anticipated; and other risks and uncertainties detailed from time to time in Ceragon's Annual Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission, that 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. We do not assume any obligation to update any forward-looking statements.
 
Investors:
Ran Vered
+972 3 543 1595
ranv@ceragon.com
 
Media:
Tanya Solomon
+972 3 5431163
tanyas@ceragon.com

 -tables follow-

3


Ceragon Reports Second Quarter 2019 Results

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)

   
Three months ended
June 30,
   
Six months ended
June 30,
 
   
2019
   
2018
   
2019
   
2018
 
                         
Revenues
 
$
73,001
   
$
88,328
   
$
142,164
   
$
171,603
 
Cost of revenues
   
46,640
     
59,579
     
91,171
     
115,250
 
                                 
Gross profit
   
26,361
     
28,749
     
50,993
     
56,353
 
                                 
Operating expenses:
                               
Research and development, net
   
6,254
     
6,821
     
12,418
     
14,035
 
Selling and marketing
   
10,121
     
10,369
     
19,583
     
20,931
 
General and administrative
   
5,854
     
5,190
     
11,636
     
9,649
 
                                 
Total operating expenses
 
$
22,229
   
$
22,380
   
$
43,637
   
$
44,615
 
                                 
Operating income
   
4,132
     
6,369
     
7,356
     
11,738
 
                                 
Financial expenses, net
   
1,830
     
2,646
     
2,939
     
4,680
 
                                 
Income before taxes
   
2,302
     
3,723
     
4,417
     
7,058
 
                                 
Taxes on income
   
1,398
     
497
     
2,532
     
1,762
 
Equity loss in affiliates
   
141
     
-
     
314
     
-
 
                                 
Net income
 
$
763
   
$
3,226
   
$
1,571
   
$
5,296
 
                                 
Basic net income per share
 
$
0.01
   
$
0.04
   
$
0.02
   
$
0.07
 
Diluted net income per share
 
$
0.01
   
$
0.04
   
$
0.02
   
$
0.07
 
                                 
Weighted average number of shares used in computing basic net income  per share
   
80,192,036
     
78,231,726
     
80,153,038
     
78,155,810
 
                                 
Weighted average number of shares used in computing diluted net income per share
   
82,051,028
     
80,850,353
     
82,192,544
     
80,457,636
 


4


Ceragon Reports Second Quarter 2019 Results

CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)

   
June 30,
2019
   
December 31,
2018
 
ASSETS
 
Unaudited
   
Audited
 
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
29,041
   
$
35,581
 
Short - term bank deposits
   
-
     
515
 
Trade receivables, net
   
121,449
     
123,451
 
Other accounts receivable and prepaid expenses
   
13,783
     
12,135
 
Inventories
   
73,900
     
53,509
 
                 
Total current assets
   
238,173
     
225,191
 
                 
NON-CURRENT ASSETS:
               
Long-term bank deposits
   
29
     
504
 
Deferred tax assets
   
6,236
     
7,476
 
   Severance pay and pension fund
   
5,574
     
5,096
 
   Property and equipment, net
   
35,009
     
33,613
 
   Intangible assets, net
   
7,670
     
6,576
 
Other non-current assets
   
15,822
     
4,544
 
                 
Total non-current assets
   
70,340
     
57,809
 
                 
Total assets
 
$
308,513
   
$
283,000
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
Trade payables
 
$
79,431
   
$
78,892
 
Deferred revenues
   
3,770
     
3,873
 
Short- term loans
   
8,900
     
-
 
Other accounts payable and accrued expenses
   
26,385
     
27,256
 
                 
Total current liabilities
   
118,486
     
110,021
 
                 
LONG-TERM LIABILITIES:
               
Deferred tax liability
   
24
     
28
 
Accrued severance pay and pension
   
10,053
     
9,711
 
Deferred revenues
   
6,265
     
-
 
Other long-term payables
   
9,926
     
3,672
 
                 
Total long-term liabilities
   
26,268
     
13,411
 
                 
SHAREHOLDERS' EQUITY:
               
Share capital:
               
    Ordinary shares
   
215
     
214
 
Additional paid-in capital
   
416,835
     
415,408
 
Treasury shares at cost
   
(20,091
)
   
(20,091
)
Other comprehensive loss
   
(8,016
)
   
(9,208
)
Accumulated deficits
   
(225,184
)
   
(226,755
)
                 
Total shareholders' equity
   
163,759
     
159,568
 
                 
Total liabilities and shareholders' equity
 
$
308,513
   
$
283,000
 


5


Ceragon Reports Second Quarter 2019 Results

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
   
Three months ended
June 30,
   
Six months ended
June 30,
 
   
2019
   
2018
   
2019
   
2018
 
Cash flow from operating activities:
                       
Net income
 
$
763
   
$
3,226
   
$
1,571
   
$
5,296
 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                               
Depreciation and amortization
   
2,318
     
1,990
     
4,438
     
3,501
 
Stock-based compensation expense
   
697
     
679
     
1,172
     
1,032
 
Increase in trade and other receivables, net
   
(3,797
)
   
(292
)
   
(10,188
)
   
(109
)
Decrease (increase) in inventory, net of write off
   
(6,663
)
   
2,561
     
(20,813
)
   
7,049
 
Decrease (increase) in deferred tax asset, net
   
646
     
(64
)
   
1,236
     
410
 
 Increase (decrease) in trade payables and accrued liabilities
   
(6,120
)
   
(4,383
)
   
9,463
     
(10,237
)
Increase in long and short – term deferred revenues
   
5,774
     
856
     
6,150
     
1,796
 
Other adjustments
   
(105
)
   
(394
)
   
(136
)
   
(186
)
Net cash provided by (used in) operating activities
 
$
(6,487
)
 
$
4,179
   
$
(7,107
)
 
$
8,552
 
Cash flow from investing activities:
                               
Purchase of property and equipment, net
   
(2,716
)
   
(658
)
   
(6,707
)
   
(3,957
)
Purchase of intangible assets, net
   
(603
)
   
(250
)
   
(2,792
)
   
(1,336
)
  Release (purchase) of long and short – term bank deposit
   
(20
)
   
-
     
920
     
-
 
Net cash used in investing activities
 
$
(3,339
)
 
$
(908
)
 
$
(8,579
)
 
$
(5,293
)
                                 
Cash flow from financing activities:
                               
Proceeds from share options exercise
   
190
     
274
     
256
     
374
 
Proceeds of short-term bank credits and loans, net
   
8,900
     
-
     
8,900
     
-
 
Net cash provided by financing activities
 
$
9,090
   
$
274
   
$
9,156
   
$
374
 
                                 
Translation adjustments on cash and cash equivalents
 
$
23
   
$
(103
)
 
$
(10
)
 
$
(112
)
Increase (decrease) in cash and cash equivalents
 
$
(713
)
 
$
3,442
   
$
(6,540
)
 
$
3,521
 
Cash and cash equivalents at the beginning of the period
   
29,754
     
25,956
     
35,581
     
25,877
 
Cash and cash equivalents at the end of the period
 
$
29,041
   
$
29,398
   
$
29,041
   
$
29,398
 

6


Ceragon Reports Second Quarter 2019 Results

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
   
(U.S. dollars in thousands)
   
(Unaudited)
   

   
Three months ended
   
Six months ended
 
   
June 30,
   
June 30,
 
   
2019
   
2018
    2019     2018  
                         
GAAP cost of revenues
 
$
46,640
   
$
59,579
   
$
91,171
   
$
115,250
 
Stock based compensation expenses
   
(16
)
   
(1
)
   
(31
)
   
(18
)
Changes in indirect tax positions
   
(9
)
   
(12
)
   
(30
)
   
(27
)
Non-GAAP cost of revenues
 
$
46,615
   
$
59,566
   
$
91,110
   
$
115,205
 
                                 
GAAP gross profit
 
$
26,361
   
$
28,749
   
$
50,993
   
$
56,353
 
Gross profit adjustments
   
25
     
13
     
61
     
45
 
Non-GAAP gross profit
 
$
26,386
   
$
28,762
   
$
51,054
   
$
56,398
 
                                 
GAAP Research and development expenses
 
$
6,254
   
$
6,821
   
$
12,418
   
$
14,035
 
Stock based compensation expenses
   
(98
)
   
(67
)
   
(201
)
   
(127
)
Non-GAAP Research and development expenses
 
$
6,156
   
$
6,754
   
$
12,217
   
$
13,908
 
                                 
GAAP Sales and Marketing expenses
 
$
10,121
   
$
10,369
   
$
19,583
   
$
20,931
 
Stock based compensation expenses
   
(207
)
   
(142
)
   
(382
)
   
(286
)
Non-GAAP Sales and Marketing expenses
 
$
9,914
   
$
10,227
   
$
19,201
   
$
20,645
 
                                 
GAAP General and Administrative expenses
 
$
5,854
   
$
5,190
   
$
11,636
   
$
9,649
 
Stock based compensation expenses
   
(376
)
   
(469
)
   
(558
)
   
(601
)
Non-GAAP General and Administrative expenses
 
$
5,478
   
$
4,721
   
$
11,078
   
$
9,048
 
                                 
GAAP financial expenses
 
$
1,830
   
$
2,646
   
$
2,939
   
$
4,680
 
Leases – financial income (expenses)
   
(218
)
   
-
     
(192
)
   
-
 
Non-GAAP financial expenses
 
$
1,612
   
$
2,646
   
$
2,747
   
$
4,680
 
                                 
GAAP Tax expenses
 
$
1,398
   
$
497
   
$
2,532
   
$
1,762
 
Non cash tax adjustments
   
(654
)
   
96
     
(1,272
)
   
(468
)
Non-GAAP Tax expenses
 
$
744
   
$
593
   
$
1,260
   
$
1,294
 
                                 
GAAP equity loss in affiliates
 
$
141
   
$
-
   
$
314
   
$
-
 
Other non-cash adjustments
   
(141
)
   
-
     
(314
)
       
Non-GAAP equity loss in affiliates
 
$
-
   
$
-
   
$
-
   
$
-
 

7


Ceragon Reports Second Quarter 2019 Results
 
 RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
   
Three months ended,
June 30,
   
Six months ended,
June 30,
 
   
2019
   
2018
   
2019
   
2018
 
                         
GAAP net income 
 
$
763
   
$
3,226
   
$
1,571
   
$
5,296
 
Stock based compensation expenses
   
697
     
679
     
1,172
     
1,032
 
Changes in indirect tax positions
   
9
     
12
     
30
     
27
 
Leases – financial expenses (income)
   
218
     
-
     
192
     
-
 
Non-cash tax adjustments
   
654
     
(96
)
   
1,272
     
468
 
Other non-cash adjustment
   
141
     
-
     
314
     
-
 
Non-GAAP net income 
 
$
2,482
   
$
3,821
   
$
4,551
   
$
6,823
 
                                 
GAAP basic net income per share
 
$
0.01
   
$
0.04
   
$
0.02
   
$
0.07
 
                                 
GAAP diluted net income per share
 
$
0.01
   
$
0.04
   
$
0.02
   
$
0.07
 
Non-GAAP basic and diluted net income per share
 
$
0.03
   
$
0.05
   
$
0.06
   
$
0.08
 
                                 
Weighted average number of shares used in computing GAAP basic net income per share
   
80,192,036
     
78,231,726
     
80,153,038
     
78,155,810
 
                                 
Weighted average number of shares used in computing GAAP diluted net income per share
   
82,051,028
     
80,850,353
     
82,192,544
     
80,457,636
 
                                 
Weighted average number of shares used in computing Non-GAAP diluted net income per share
   
82,249,605
     
81,156,546
     
82,475,897
     
80,767,046
 

8