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6-K 1 zk2330067.htm 6-K

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 August 2023
 
Commission File Number: 0-30862

 CERAGON NETWORKS LTD.
(Translation of registrant’s name into English)
 
3 Uri Ariav St., Rosh Ha’Ayin, Israel, 4810002
(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: August 1, 2023
By:  /s/ Doron Arazi
 
Name: Doron Arazi
Title: Chief Executive Officer

2


 
Exhibit
 
Description
 

3
EX-99 2 exhibit_a.htm EXHIBIT A
Exhibit A

Ceragon Networks Reports 22% Growth in Second Quarter and
Raises Full Year Guidance

Company Generates $2.1 Million in GAAP Net Income and Positive Free Cash Flow
Raises Full Year Revenue Outlook to $334 - $348 Million

Rosh Ha’ain, Israel, August 1, 2023 - Ceragon Networks Ltd. (NASDAQ: CRNT), the global innovator and leading solutions provider of 5G wireless transport, today reported its financial results for the second quarter and six months ended June 30, 2023.
 
Q2 2023 Financial Highlights:
 

 •
Revenues of $86.2 million

•
Operating income of $5.7 million on a GAAP basis, or $7.4 million on a non-GAAP basis; The non-GAAP operating income excludes an $0.9 million restructuring charge related to European operations.

•
EPS of $0.02 per diluted share on a GAAP basis, or $0.05 per diluted share on a non-GAAP basis
 
Q2 2023 Business Highlights:
 

 •
Book-to-bill above 1 on a quarterly and trailing 12-month basis

•
Ceragon won a multi-year contract worth up to $4.2 million with the City of Cincinnati to upgrade its public safety network

•
North America:

o
Nearly matched India in Q2 bookings, with bookings increasing nearly 10% sequentially compared to Q1

o
Continued strong revenue in Q2

•
India:

o
Strongest region in terms of Q2 bookings and revenue

o
Strong demand for ongoing 4G network and 5G network rollouts
 
Doron Arazi, CEO, commented: “Ceragon delivered strong double digit year-over-year revenue growth, margin expansion and solid profitability in the second quarter. During the quarter, we again recorded bookings that exceeded our revenue levels which improved our visibility into the third quarter and strengthened our confidence for the full year. We have not seen any signs of a slowdown or changes in demand across our customer base and remain focused on our operational execution as well as efforts to enhance our  product portfolio including new product line based on system-on-a-chip technology."
 
“Demand in key geographies remains robust, and we continue to deliver solid execution,” Arazi added. “Our year-to-date performance and improved visibility into the third quarter has given us the confidence to increase our full-year guidance and narrow the range to increase the midpoint.”
 


Primary Second Quarter 2023 Financial Results:
 
Revenues were $86.2 million, up 21.9% from $70.7 million in Q2 2022 and up 3.3% from $83.4 million in Q1 2023.
 
Gross profit was $30.4 million, giving us a gross margin of 35.2%, compared with a gross margin of 30.3% in Q2 2022 and 33.8% in Q1 2023.
 
Operating income (loss) was $5.7 million compared with $(0.3) million for Q2 2022 and $4.7 million for Q1 2023.
 
Net Income (loss) was $2.1 million, or $0.02 per diluted share compared with $(1.5) million, or $(0.02) per diluted share for Q2 2022 and $2.0 million, or $0.02 per diluted share for Q1 2023.
 
Non-GAAP results were as follows: Gross margin was 35.3%, operating profit was $7.4 million, and net income was $4.4 million, or $0.05 per diluted share.
 
Cash and cash equivalents were $24.5 million at June 30, 2023, compared to $26.4 million at March 31, 2023.
 
For a reconciliation of GAAP to non-GAAP results, see the attached tables.

Revenue Breakout by Geography:

 
Q2 2023
India
31%
North America
26%
Latin America
15%
Europe
12%
APAC
11%
Africa
5%

Outlook

Ceragon management increased full-year revenue guidance to $334 million to $348 million, up from prior guidance of $325 - $345 million and expects full-year non-GAAP profitability. Our guidance is based on current visibility and assumes normal conversion of bookings to revenue. Our revenue target for fiscal 2027 is approximately $500 million, and we also target increasing our gross margins to at least 34-36% over the same period.
 
Conference Call
 
The Company will host a Zoom web conference today at 8:30a.m. ET to discuss the results, followed by a question-and-answer session for the investment community.
 
Investors are invited to register by clicking here. 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 broadband wireless connectivity, mission-critical multimedia services, stabilized communications, 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 complete portfolio of turnkey end-to-end AI-based managed and professional services that ensure efficient network rollout and optimization to achieve the highest value for our customers. Our solutions are deployed by more than 600 service providers, as well as more than 1,600 private network owners, in more than 130 countries. For more information please visit: www.ceragon.com

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.
 
Safe Harbor

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, but are not limited to, statements regarding: projections of demand, revenues, net income, gross margin, capital expenditures and liquidity, competitive pressures, order timing, supply chain and shipping, components availability, 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 not all forward-looking statements contain these identifying words.

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 forward-looking statements involve known and unknown risks and uncertainties that may cause Ceragon’s future results or performance to differ materially from those anticipated, expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the effects of global economic trends, including recession, rising inflation, rising interest rates, commodity price increases and fluctuations, commodity shortages and exposure to economic slowdown; risks associated with delays in the transition to 5G technologies and in the 5G rollout; risks relating to the concentration of our business on a limited number of large mobile operators and the fact that the significant weight of their ordering, compared to the overall ordering by other customers, coupled with inconsistent ordering patterns, could negatively affect us; risks resulting from the volatility in our revenues, margins and working capital needs, substantial losses incurred and negative cash flows generated, which, if continue, may significantly adversely impact our results of operations and cash flow; the high volatility in the supply needs of our customers, which from time to time lead to delivery issues and may lead to us being unable to timely 1ulfil our customer commitments; risks associated with inaccurate forecasts or business changes, which may expose us to inventory-related losses on inventory purchased by our contract manufacturers and other suppliers, to increased expenses should unexpected production ramp up be required, or to write off to parts of our inventory, which would increase our cost of revenues; and such other risks, uncertainties and other factors that could affect our results of operation, as further detailed in Ceragon’s most recent Annual Report on Form 20-F , as published on May 1, 2023, as well as other documents that may be subsequently filed by Ceragon from time to time with the SEC.


We caution you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Ceragon does not assume any obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless required by law.

While we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. In addition, any forward-looking statements represent Ceragon’s views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Ceragon does not assume any obligation to update any forward-looking statements unless 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.

Ceragon Investor & Media Contact:

Rob Fink or Bob Meyers
FNK IR
Tel. 1+646-809-4048
crnt@fnkir.com
 
-Tables Follow-


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

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
                         
Revenues
  
$
86,151
    
$
70,674
    
$
169,560
    
$
140,993
  
Cost of revenues
    
55,795
      
49,268
      
111,028
      
100,250
  
                                 
Gross profit
    
30,356
      
21,406
      
58,532
      
40,743
  
                                 
Operating expenses:
                                
Research and development, net
    
7,812
      
7,527
      
15,750
      
14,292
  
Sales and Marketing
    
9,778
      
9,362
      
19,974
      
18,134
  
General and administrative
    
6,218
      
4,840
      
11,542
      
9,898
  
Restructuring and related charges
    
897
      
-
      
897
      
-
  
                                 
Total operating expenses
  
$
24,705
    
$
21,729
    
$
48,163
    
$
42,324
  
                                 
Operating income (loss)
    
5,651
      
(323
)
    
10,369
      
(1,581
)
                                 
Financial expenses and others, net
    
1,886
      
757
      
3,344
      
1,516
  
                                 
Income (loss) before taxes
    
3,765
      
(1,080
)
    
7,025
      
(3,097
)
                                 
Taxes on income
    
1,677
      
440
      
2,969
      
711
  
                                 
Net income (loss)
  
$
2,088
    
$
(1,520
)
  
$
4,056
    
$
(3,808
)
                                 
Basic net income (loss) per share
  
$
0.02
    
$
(0.02
)
  
$
0.05
    
$
(0.05
)
                                 
Diluted net income (loss) per share
  
$
0.02
    
$
(0.02
)
  
$
0.05
    
$
(0.05
)
                                 
Weighted average number of shares used in computing basic net income (loss) per share
    
84,365,168
      
84,019,188
      
84,359,762
      
83,989,766
  
                                 
Weighted average number of shares used in computing diluted net income (loss) per share
    
85,312,954
      
84,019,188
      
85,152,634
      
83,989,766
  


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

   
June 30,
2023
    
December 31,
2022
  

 
Unaudited
    
Audited
  
  ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
24,529
    
$
22,948
  
Trade receivables, net
    
107,592
      
100,034
  
Other accounts receivable and prepaid expenses
    
15,813
      
15,756
  
Inventories
    
67,836
      
72,009
  
                 
Total current assets
    
215,770
      
210,747
  
                 
NON-CURRENT ASSETS:
                
   Severance pay and pension fund
    
4,705
      
4,633
  
   Property and equipment, net
    
30,494
      
29,456
  
   Operating lease right-of-use assets
    
16,724
      
17,962
  
   Intangible assets, net
    
9,027
      
8,208
  
    Other non-current assets
    
17,744
      
18,312
  
                 
Total non-current assets
    
78,694
      
78,571
  
                 
Total assets
  
$
294,464
    
$
289,318
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES:
                
Trade payables
  
$
62,769
    
$
67,384
  
Deferred revenues
    
3,104
      
3,343
  
Short-term loans
    
39,550
      
37,500
  
Operating lease liabilities
    
3,246
      
3,745
  
Other accounts payable and accrued expenses
    
23,565
      
20,864
  
                 
Total current liabilities
    
132,234
      
132,836
  
                 
LONG-TERM LIABILITIES:
                
Accrued severance pay and pensions
    
9,054
      
9,314
  
Deferred revenues
    
12,170
      
11,545
  
Other long-term payables
    
2,797
      
2,653
  
Operating lease liabilities
    
11,827
      
13,187
  
                 
Total long-term liabilities
    
35,848
      
36,699
  
                 
SHAREHOLDERS' EQUITY:
                
Share capital:
                
     Ordinary shares
    
224
      
224
  
Additional paid-in capital
    
434,221
      
432,214
  
Treasury shares at cost
    
(20,091
)
    
(20,091
)
Other comprehensive loss
    
(10,620
)
    
(11,156
)
Accumulated deficits
    
(277,352
)
    
(281,408
)
                 
Total shareholders' equity
    
126,382
      
119,783
  
                 
Total liabilities and shareholders' equity
  
$
294,464
    
$
289,318
  



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

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
Cash flow from operating activities:
                        
Net income (loss)
  
$
2,088
    
$
(1,520
)
  
$
4,056
    
$
(3,808
)
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
                                
Depreciation and amortization
    
2,582
      
2,834
      
5,135
      
5,775
  
Loss from sale of property and equipment, net
    
20
      
2
      
30
      
20
  
Stock-based compensation expense
    
808
      
689
      
1,977
      
1,435
  
Decrease in accrued severance pay and pensions, net
    
(280
)
    
(296
)
    
(344
)
    
(369
)
Increase in trade receivables, net
    
(6,620
)
    
(2,609
)
    
(6,910
)
    
(4,173
)
Decrease (increase) in other accounts receivable and prepaid expenses (including other long term assets)
    
(445
)
    
(1,278
)
    
551
      
(3,056
)
Decrease in operating lease right-of-use assets
    
886
      
892
      
1,897
      
1,873
  
Decrease (increase) in inventory, net of write off
    
893
      
(3,102
)
    
4,059
      
449
  
Increase (decrease) in trade payables
    
2,835
      
3,103
      
(3,955
)
    
1,339
  
Increase (decrease) in other accounts payable and accrued expenses (including other long term liabilities)
    
2,620
      
(433
)
    
2,326
      
(1,706
)
Decrease in operating lease liability
    
(1,152
)
    
(2,666
)
    
(2,518
)
    
(4,071
)
Increase (decrease) in deferred revenues
    
(1,054
)
    
1,211
      
386
      
1,303
  
Net cash provided by (used in) operating activities
  
$
3,181
    
$
(3,173
)
  
$
6,690
    
$
(4,989
)
                                 
Cash flow from investing activities:
                                
Purchase of property and equipment, net
    
(2,330
)
    
(2,845
)
    
(5,472
)
    
(5,368
)
Purchase of intangible assets, net
    
(549
)
    
(234
)
    
(1,837
)
    
(437
)
Net cash used in investing activities
  
$
(2,879
)
  
$
(3,079
)
  
$
(7,309
)
  
$
(5,805
)
                                 
Cash flow from financing activities:
                                
Proceeds from exercise of options
    
30
      
32
      
30
      
113
  
Proceeds from (repayment of) bank credits and loans, net
    
(2,300
)
    
4,950
      
2,050
      
17,100
  
Net cash provided by (used in) financing activities
  
$
(2,270
)
  
$
4,982
    
$
2,080
    
$
17,213
  
                                 
Translation adjustments on cash and cash equivalents
  
$
74
    
$
(98
)
  
$
120
    
$
94
  
Increase (decrease) in cash and cash equivalents
  
$
(1,894
)
  
$
(1,368
)
  
$
1,581
    
$
6,513
  
Cash and cash equivalents at the beginning of the period
    
26,423
      
24,960
      
22,948
      
17,079
  
Cash and cash equivalents at the end of the period
  
$
24,529
    
$
23,592
    
$
24,529
    
$
23,592
  



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

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
                         
GAAP cost of revenues
  
$
55,795
    
$
49,268
    
$
111,028
    
$
100,250
  
Stock based compensation expenses
    
(46
)
    
(125
)
    
(225
)
    
(257
)
Changes in indirect tax positions
    
(2
)
    
(1
)
    
(3
)
    
(1
)
Non-GAAP cost of revenues
  
$
55,747
    
$
49,142
    
$
110,800
    
$
99,992
  
                                 
GAAP gross profit
  
$
30,356
    
$
21,406
    
$
58,532
    
$
40,743
  
Gross profit adjustments
    
48
      
126
      
228
      
258
  
Non-GAAP gross profit
  
$
30,404
    
$
21,532
    
$
58,760
    
$
41,001
  
                                 
GAAP Research and development expenses
  
$
7,812
    
$
7,527
    
$
15,750
    
$
14,292
  
Stock based compensation expenses
    
(232
)
    
(34
)
    
(478
)
    
(20
)
Non-GAAP Research and development expenses
  
$
7,580
    
$
7,493
    
$
15,272
    
$
14,272
  
                                 
GAAP Sales and Marketing expenses
  
$
9,778
    
$
9,362
    
$
19,974
    
$
18,134
  
Stock based compensation expenses
    
(363
)
    
(302
)
    
(739
)
    
(579
)
Non-GAAP Sales and Marketing expenses
  
$
9,415
    
$
9,060
    
$
19,235
    
$
17,555
  
                                 
GAAP General and Administrative expenses
  
$
6,218
    
$
4,840
    
$
11,542
    
$
9,898
  
Retired CEO compensation
    
-
      
-
      
-
      
96
  
Stock based compensation expenses
    
(167
)
    
(228
)
    
(535
)
    
(579
)
Non-GAAP General and Administrative expenses
  
$
6,051
    
$
4,612
    
$
11,007
    
$
9,415
  
                                 
GAAP Restructuring and related charges
  
$
897
    
$
-
    
$
897
    
$
-
  
Restructuring
    
(897
)
    
-
      
(897
)
    
-
  
Non-GAAP Restructuring and related charges
  
$
-
    
$
-
    
$
-
    
$
-
  
                                 
GAAP operating income (loss)
  
$
5,651
    
$
(323
)
  
$
10,369
    
$
(1,581
)
Stock based compensation expenses
    
808
      
689
      
1,977
      
1,435
  
Changes in indirect tax positions
    
2
      
1
      
3
      
1
  
Restructuring and related charges
    
897
      
-
      
897
      
-
  
Retired CEO compensation
    
-
      
-
      
-
      
(96
)
Non-GAAP operating income (loss)
  
$
7,358
    
$
367
    
$
13,246
    
$
(241
)
                                 
GAAP financial expenses and others, net
  
$
1,886
    
$
757
    
$
3,344
    
$
1,516
  
Leases – financial income
    
285
      
1,774
      
643
      
2,199
  
Non-GAAP financial expenses and others, net
  
$
2,171
    
$
2,531
    
$
3,987
    
$
3,715
  
                                 
GAAP Tax expenses
  
$
1,677
    
$
440
    
$
2,969
    
$
711
  
Non cash tax adjustments
    
(890
)
    
(136
)
    
(1,743
)
    
(346
)
Non-GAAP Tax expenses
  
$
787
    
$
304
    
$
1,226
    
$
365
  


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,
  
   
2023
    
2022
    
2023
    
2022
  
                         
   GAAP net income (loss)
  
$
2,088
    
$
(1,520
)
  
$
4,056
    
$
(3,808
)
   Stock based compensation expenses
    
808
      
689
      
1,977
      
1,435
  
   Changes in indirect tax positions
    
2
      
1
      
3
      
1
  
   Leases – financial income
    
(285
)
    
(1,774
)
    
(643
)
    
(2,199
)
   Retired CEO compensation
    
-
      
-
      
-
      
(96
)
   Restructuring and related charges
    
897
      
-
      
897
      
-
  
   Non-cash tax adjustments
    
890
      
136
      
1,743
      
346
  
                                 
Non-GAAP net income (loss)
  
$
4,400
    
$
(2,468
)
  
$
8,033
    
$
(4,321
)
                                 
GAAP basic net income (loss) per share
  
$
0.02
    
$
(0.02
)
  
$
0.05
    
$
(0.05
)
                                 
GAAP diluted net income (loss) per share
  
$
0.02
    
$
(0.02
)
  
$
0.05
    
$
(0.05
)
                                 
Non-GAAP diluted net  income (loss) per share
  
$
0.05
    
$
(0.03
)
  
$
0.09
    
$
(0.05
)
                                 
Weighted average number of shares used in computing GAAP basic net income (loss) per share
    
84,365,168
      
84,019,188
      
84,359,762
      
83,989,766
  
                                 
Weighted average number of shares used in computing GAAP diluted net  income (loss) per share
    
85,312,954
      
84,019,188
      
85,152,634
      
83,989,766
  
                                 
Weighted average number of shares used in computing Non-GAAP diluted net income (loss) per share
    
86,747,484
      
84,019,188
      
86,729,802
      
83,989,766