SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 6-K
 
REPORT OF  FOREIGN  PRIVATE  ISSUER  PURSUANT  TO RULE 13a-16  OR
15d-16  UNDER THE  SECURITIES  EXCHANGE  ACT  OF  1934

For the month of May 4, 2020
 
Commission File Number: 0-30862
 
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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____   

SIGNATURES

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: May 4, 2020
By:  /s/ Ran Vered
 
Name: Ran Vered
Title: Chief Financial Officer



Exhibit Description

Exhibit A –  CERAGON NETWORKS REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2020

2


Exhibit A

Ceragon Networks Reports Financial Results for the First Quarter of 2020

May 4, 2020


CERAGON NETWORKS REPORTS FINANCIAL RESULTS
FOR THE FIRST QUARTER OF 2020
 
-    Weak COVID-19-driven results countered by strong bookings and renewed orders from strategic customers –

-    Increasing demand for broadband connectivity in the ‘new normal’ expected to
accelerate 5G network deployments, creating long-term demand for Ceragon wireless
hauling solutions -

Little Falls, New Jersey, May 4, 2020 - Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless hauling specialist, today reported results for the first quarter ended March 31, 2020.
 
First Quarter 2020 Highlights
Weak results reflecting COVID-19 challenges compounded by normal Q1 seasonality
Strong bookings (book-to-bill ratio well above 1) as service providers addressed increased demand for broadband connectivity
Return of India as major source of business; highest Q1 bookings in Europe in 6 years
Management believes trends created by the COVID-19 crisis will accelerate the global 5G network rollout, driving long-term growth momentum for Ceragon. However, management remains cautious because of the risk of a potential worldwide recession.
Primary Financial Results:
 
Revenues: $55.9 million compared with $69.2 million for Q1’19 and $71.3 million for Q4’19.
 
Gross margin: 25.1% compared to 35.6% for Q1’19 and 31.7% for Q4’19.
 
Operating income (loss): $(6.0) million compared with $3.2 million for Q1’19 and $(2.2) million for Q4’19.
 
Net income (loss): $(6.9) million, $(0.09) per diluted share compared with $0.8 million, $0.01 per diluted share for Q1’19 and $(4.1) million, or $(0.05) per diluted share for Q4’19.
 
Non-GAAP results: gross margin 25.1%, operating loss $(5.6) million, and net loss $(6.7) million, or $(0.08) per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.
 
Cash and cash equivalents: $44.1 million at March 31, 2020, compared to $23.9 million at December 31, 2019.

 
Commenting on the results, Ira Palti, President and CEO of Ceragon, said, “Our results were in line with the business update we provided on April 6th, reflecting the normal seasonality of the first quarter compounded by the disruption created by the COVID-19 environment. At the same time, the sweeping changes that the pandemic has made in the way we all work, shop, learn and stay entertained have created a global surge in demand for broadband capacity that has increased demand for our products. Although no one knows how to predict the timing of the recovery, the fact that broadband connectivity is now recognized as an essential utility brings urgency to the need to increase the capacity of existing networks and to extend network coverage to more of the population. During the first quarter, this trend accelerated bookings for our wireless hauling solutions, and we believe it will accelerate the transition to 5G, further emphasizing the need for our differentiated technologies.”
 
Mr. Palti continued, “In the meantime, we are fully focused on serving our customers in today’s dynamic environment. We are proud of our success in meeting our commitments in the face of supply chain disruptions, and working to overcome challenges as they arise. We are pleased that India’s Airtel has recently placed a large order, indicating the return of India as a major focus market after last year’s slowdown. In Europe, we had the strongest first-quarter bookings in six years, and in Latin America we continued executing on expansion projects across the continent.”
 
Mr. Palti concluded, “Looking forward, concerns of a global recession could surely delay operators’ network investments, dampening short-to-mid-term demand for our equipment. However, with strong ongoing operations, a healthy balance sheet and a new urgency to the 5G market, we believe we are positioned favorably and expect to emerge from today’s challenges as a leader in a growing market.”
 
Supplemental revenue breakouts by geography:
 
First quarter 2020:

 •          Europe:
15%
 •          Africa:
6%
 •          North America:
13%
 •          Latin America:
20%
 •          India:
25%
 •          APAC
21%

2

 
A conference call will follow beginning at 9:00 a.m. EST. Investors are invited to join the company’s teleconference by calling (USA) (844) 291-6360 or international +1 (234) 720-6993 and using the following access code: 6063623.

Investors can also listen to the call live via the Internet by accessing Ceragon Networks’ website on the webcasts page in the section for investors: 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) (866) 207-1041 (International) +1 (402) 970-0847, with access code: 8883765. This audio replay will be available through June 4, 2020.
 
About Ceragon Networks Ltd.
 
Ceragon Networks Ltd. (NASDAQ: CRNT) is the #1 wireless hauling specialist. 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 wireless 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 hauling provides highly reliable, fast to deploy, high-capacity wireless hauling for 5G and 4G networks with minimal use of spectrum, power and other 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 460 service providers, as well as hundreds of private network owners, in more than 130 countries. 
 
Join the Discussion
                 
 
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 concerning Ceragon's future prospects that are "forward-looking statements" within the meaning of the Securities Act of 1933 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 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 risk of a disruption to our and our customers’ business related to the outbreak of the novel coronavirus (COVID-19) pandemic (“Coronavirus”); the risk of macro-economic downturn and slowdown of development and significant decline of business that can harm our and our customers’ ability to conduct or further develop our/their business, including, cancellation, suspension or reduction in the investment in new equipment purchases, postponement or cancellation of rollout of wireless networks, postponement in the transition to 5G technologies and in the introduction of new products and capabilities, inability to deliver and perform under our contracts, disruption to our supply chain and production capacity, 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; 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, including the risks of deviations from our expectations of timing and size of orders from these customers; the risk of delays in converting design wins into revenue as well as the expected revenue growth; risks associated with any failure to meet our product development timetable and specifications and to maintain our technological advantage over our competitors; risks associated with any failure to effectively compete with other wireless equipment providers; the risk that the rollout of 5G services could take longer or differently than anticipated; and other risks and uncertainties detailed from time to time in Ceragon's Annual Report on Form 20-F, Item 3, under the caption “Risk Factors”, 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. Such forward-looking statements do not purport to be predictions of future events or circumstances, and therefore, there can be no assurance that any forward-looking statement contained in our announcements, presentations, or commentary will prove to be accurate. We do not assume any obligation to update any forward-looking statements.
 
Investors:
Osi Sessler
+972 3 5431047
investor@ceragon.com
 
Media:
Tanya Solomon
+972 3 5431163
media@ceragon.com
 
-tables follow-


3

Ceragon Reports First Quarter 2020 Results

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

 
Three months ended
 
   
March 31,
 
   
2020
   
2019
 
             
Revenues
 
$
55,871
   
$
69,163
 
Cost of revenues
   
41,861
     
44,531
 
                 
Gross profit
   
14,010
     
24,632
 
                 
Operating expenses:
               
Research and development, net
   
7,290
     
6,164
 
Selling and marketing
   
8,273
     
9,462
 
General and administrative
   
4,456
     
5,782
 
                 
Total operating expenses
 
$
20,019
   
$
21,408
 
                 
Operating income (loss)
   
(6,009
)
   
3,224
 
Financial expenses and others, net
   
308
     
1,109
 
                 
Income (loss) before taxes
   
(6,317
)
   
2,115
 
                 
Taxes on income
   
380
     
1,134
 
Equity loss in affiliates
   
183
     
173
 
                 
Net income (loss)
 
$
(6,880
)
 
$
808
 
                 
 Basic net income (loss) per share
 
$
(0.09
)
 
$
0.01
 
 Diluted net income (loss) per share
 
$
(0.09
)
 
$
0.01
 
                 
Weighted average number of shares used in computing basic net income (loss) per share
   
80,764,932
     
80,113,607
 
                 
Weighted average number of shares used in computing diluted net income (loss) per share
   
80,764,932
     
82,333,627
 

4


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

   
March 31,
2020
   
December 31,
2019
 
ASSETS
 
Unaudited
   
Audited
 
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
44,120
   
$
23,939
 
Trade receivables, net
   
104,185
     
118,531
 
Other accounts receivable and prepaid expenses
   
12,215
     
11,033
 
Inventories
   
59,659
     
62,132
 
                 
Total current assets
   
220,179
     
215,635
 
                 
NON-CURRENT ASSETS:
               
Long-term bank deposits
   
16
     
17
 
Deferred tax assets
   
8,130
     
8,106
 
   Severance pay and pension fund
   
5,654
     
5,661
 
   Property and equipment, net
   
33,589
     
34,865
 
   Intangible assets, net
   
8,033
     
7,898
 
Other non-current assets
   
17,070
     
17,707
 
                 
Total non-current assets
   
72,492
     
74,254
 
                 
Total assets
 
$
292,671
   
$
289,889
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
Trade payables
 
$
55,553
   
$
59,635
 
Deferred revenues
   
3,343
     
1,734
 
Short-term loans
   
32,855
     
14,600
 
Other accounts payable and accrued expenses
   
25,598
     
28,399
 
                 
Total current liabilities
   
117,349
     
104,368
 
                 
LONG-TERM LIABILITIES:
               
Accrued severance pay and pension
   
10,295
     
10,709
 
Deferred revenues
   
6,265
     
6,265
 
Other long-term payables
   
7,348
     
8,126
 
                 
 Total long-term liabilities
   
23,908
     
25,100
 
                 
SHAREHOLDERS' EQUITY:
               
Share capital:
               
    Ordinary shares
   
215
     
215
 
Additional paid-in capital
   
418,734
     
418,062
 
Treasury shares at cost
   
(20,091
)
   
(20,091
)
Other comprehensive loss
   
(10,765
)
   
(8,666
)
Accumulated deficits
   
(236,679
)
   
(229,099
)
                 
Total shareholders' equity
   
151,414
     
160,421
 
                 
Total liabilities and shareholders' equity
 
$
292,671
   
$
289,889
 

5


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)

   
Three months ended
 
   
March 31,
 
   
2020
   
2019
 
Cash flows from operating activities:
           
Net Income (loss)
 
$
(6,880
)
 
$
808
 
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
               
                 
Depreciation and amortization
   
2,704
     
2,120
 
Stock-based compensation expense
   
426
     
475
 
Decrease (increase) in trade and other receivables, net
   
11,868
     
(6,391
)
Decrease (increase) in inventory, net of write-off
   
1,997
     
(14,150
)
Decrease (increase) in deferred tax asset, net
   
(24
)
   
590
 
Increase (decrease) in trade payables and accrued
   Liabilities
   
(8,130
)
   
15,583
 
Increase in deferred revenues
   
1,609
     
376
 
Other adjustments
   
(443
)
   
(31
)
Net cash provided by (used in) operating activities
 
$
3,127
   
$
(620
)
                 
Cash flows from investing activities:
               
Purchase of property and equipment, net
   
(959
)
   
(3,991
)
Purchase of intangible assets, net
   
(243
)
   
(2,189
)
Proceeds from bank deposits
   
-
     
940
 
Net cash used in investing activities
 
$
(1,202
)
 
$
(5,240
)
                 
Cash flow from financing activities:
               
Proceeds from bank credits and loans, net
   
18,255
     
-
 
Proceeds from exercise of options
   
246
     
66
 
Net cash provided by financing activities
 
$
18,501
   
$
66
 
                 
Translation adjustments on cash and cash equivalents
 
$
(245
)
 
$
(33
)
                 
Increase (decrease) in cash and cash equivalents
 
$
20,181
   
$
(5,827
)
                 
Cash and cash equivalents at the beginning of the period
   
23,939
     
35,581
 
                 
Cash and cash equivalents at the end of the period
 
$
44,120
   
$
29,754
 


6


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

   
Three months ended
March 31,
 
   
2020
   
2019
 
             
GAAP cost of revenues
 
$
41,861
   
$
44,531
 
Stock based compensation expenses
   
(27
)
   
(15
)
Changes in indirect tax positions
   
(1
)
   
(21
)
Non-GAAP cost of revenues
 
$
41,833
   
$
44,495
 
                 
GAAP gross profit
 
$
14,010
   
$
24,632
 
Gross profit adjustments
   
28
     
36
 
Non-GAAP gross profit
 
$
14,038
   
$
24,668
 
                 
GAAP Research and development expenses
 
$
7,290
   
$
6,164
 
Stock based compensation expenses
   
(89
)
   
(103
)
Non-GAAP Research and development expenses
 
$
7,201
   
$
6,061
 
                 
GAAP Sales and Marketing expenses
 
$
8,273
   
$
9,462
 
Stock based compensation expenses
   
(100
)
   
(175
)
Non-GAAP Sales and Marketing expenses
 
$
8,173
   
$
9,287
 
                 
GAAP General and Administrative expenses
 
$
4,456
   
$
5,782
 
Stock based compensation expenses
   
(210
)
   
(182
)
Non-GAAP General and Administrative expenses
 
$
4,246
   
$
5,600
 
                 
GAAP financial expenses and others, net
 
$
308
   
$
1,109
 
Leases – financial income
   
450
     
26
 
Non-GAAP financial expenses and others, net
 
$
758
   
$
1,135
 
                 
GAAP Tax expenses
 
$
380
   
$
1,134
 
Non-cash tax adjustments
   
(15
)
   
(618
)
Non-GAAP Tax expenses
 
$
365
   
$
516
 
                 
GAAP equity loss in affiliates
 
$
183
   
$
173
 
Other non-cash adjustments
   
(183
)
   
(173
)
Non-GAAP equity loss in affiliates
 
$
-
   
$
-
 

7


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)

   
Three months ended
March 31,
 
   
2020
   
2019
 
             
GAAP net income (loss)
 
$
(6,880
)
 
$
808
 
Stock based compensation expenses
   
426
     
475
 
Changes in indirect tax positions
   
1
     
21
 
Leases – financial income
   
(450
)
   
(26
)
Non-cash tax adjustment
   
15
     
618
 
Other non-cash adjustment
   
183
     
173
 
                 
Non-GAAP net income (loss)
 
$
(6,705
)
 
$
2,069
 
                 
GAAP basic net income (loss) per share
 
$
(0.09
)
 
$
0.01
 
                 
GAAP diluted net income (loss) per share
 
$
(0.09
)
 
$
0.01
 
                 
Non-GAAP diluted net income (loss) per share
 
$
(0.08
)
 
$
0.03
 
                 
Weighted average number of shares used in computing
   GAAP basic net income (loss) per share
   
80,764,932
     
80,113,607
 
                 
Weighted average number of shares used in computing
   GAAP diluted net income (loss) per share
   
80,764,932
     
82,333,627
 
                 
Weighted average number of shares used in computing
   Non-GAAP diluted net income (loss) per share
   
80,764,932
     
82,701,755
 

8