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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2000
Ceragon Networks Ltd.
--------------------------------------------------------------------------------
(Translation of registrant's name into English)
24 Raoul Wallenberg Street, Tel Aviv 69719, Israel
--------------------------------------------------------------------------------
(Address of principal executive office)
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 X 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 X
--- ---
NY2:\978717\01\KZ6L01!.DOC\47958.0003
<PAGE>
The following are included in this Report on Form 6-K:
1. Press release dated October 24, 2000.
2
<PAGE>
CERAGON NETWORKS LOGO
FOR IMMEDIATE RELEASE
---------------------
CERAGON NETWORKS LTD. ANNOUNCES RECORD THIRD QUARTER RESULTS
REVENUE INCREASES 56% FROM Q2 OF 2000
TEL AVIV, ISRAEL, OCTOBER 24, 2000--Ceragon Networks Ltd. (NASDAQ:
CRNT), a global provider of high-capacity broadband wireless systems for next
generation communications networks, today announced record results for the third
quarter, which ended September 30, 2000.
Revenues for the third quarter hit a record at $8.3 million, rising 56.3%
from Q2 of 2000 and representing a 538% increase over revenues of $1.3 million
in the third quarter of 1999. The rapid revenue growth reflects the company's
capitalization on the emerging global demand for broadband networks. Ceragon
Networks' successful IPO was completed on August 4th, 2000 and raised
approximately $98 million.
Gross profit(*) in the third quarter was $3.6 million, or 43.2% of
revenues, compared to a gross profit of $0.2 million, or 15.7% of revenues, in
the third quarter of 1999. Net loss for the third quarter of 2000 was $0.8
million, or $0.04 basic and diluted net loss per ordinary share, compared to
$1.5 million, or $0.15 basic and diluted net loss per ordinary share for the
third quarter of 1999. This compares to a net loss in the second quarter of 2000
of $1.1 million, or $0.08 basic and diluted net loss per ordinary share.
Revenues for the first nine months of the year increased to $16.9 million
from $ 2.2 million in the first nine months of 1999. Gross profit for the first
nine months was $7.2 million, or 42.7% of revenues, compared to a gross profit
of $0.3 million, or 15.0% of revenues, in the first nine months of 1999. Net
loss for the first nine months of 2000 was $3.1 million, or $0.21 basic and
diluted net loss per ordinary share. Net loss for the first nine months of 1999
was $3.9 million, or $0.59 basic and diluted net loss per ordinary share.
(*) Gross profit, net loss and net loss per share are pro-forma (see note 1).
(MORE)
<PAGE>
CERAGON NETWORKS RECORD Q3 RESULTS--2
"The increased global demand for high-capacity connectivity is
favorably reflected in our financial performance," said Shraga Katz, president
and CEO, Ceragon Networks. "Our financial success reflects a precise execution
of our strategy as shown by our industry leading gross margin. We have clearly
identified and seized a business opportunity in this market and are accelerating
the company's growth by increasing our manufacturing capacity and R&D
activities.
"We have been able to increase revenues by strengthening our strategic
relationships with companies such as Nortel and Siemens, and by expanding
commercial deployments worldwide with leading service providers such as
FirstMark Communications," continued Katz. "A key differentiator for Ceragon is
our broad customer base, which spans North America, Europe and Asia-Pacific."
NOTE 1 - PRO-FORMA FINANCIAL PRESENTATION
Pro-forma results are presented for informational purposes only. Pro-forma
financial results exclude the effect of stock-based, non-cash deferred
compensation expense and exclude the effect of non-cash dividend related to
convertible preferred shares.
ABOUT CERAGON NETWORKS LTD.
---------------------------
Ceragon Networks Ltd. is a pacesetter in broadband wireless networking
systems, enabling high-capacity connectivity in metropolitan areas. Uniquely
designed for high-growth, global communications service providers to generate
immediate revenue, Ceragon's commercially proven intelligent broadband network
solutions support high-speed Internet access and integrated data, video and
voice services. Ceragon's FibeAir product family operates across multiple
licensed frequencies from 18 to 38 GHz while complying with North American and
International standards and delivering IP, SONET/SDH and ATM broadband networks.
Ceragon's products enable quick and cost-effective connections for capacity
constrained business customers within their own networks, or as a gateway onto
the backbone infrastructure. Founded in 1996, Ceragon is headquartered in Tel
Aviv, Israel, with North American headquarters in New Jersey and European
Headquarters in the UK. More information is available at www.ceragon.com.
Ceragon Networks - the shape of next generation networks.
(MORE)
2
<PAGE>
CERAGON NETWORKS RECORD Q3 RESULTS--3
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)
PROFORMA (*)
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
------------------ ------------------
1999 2000 1999 2000
---- ---- ---- ----
(UNAUDITED)
-----------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 1,307 $ 8,345 $ 2,166 $ 16,881
Cost of revenues 1,101 4,742 1,842 9,669
--------- ---------- --------- ----------
Gross profit 206 3,603 324 7,212
--------- ---------- --------- ----------
Operating expenses
Research and development 1,391 2,922 3,530 6,497
Less: participation by the Chief
Scientist of the Government of Israel 394 598 1,096 1,761
--------- ---------- --------- ----------
Research and development, net 997 2,324 2,434 4,736
--------- ---------- --------- ----------
Marketing and selling 580 2,393 1,389 5,438
General and administrative 142 541 335 1,170
--------- ---------- --------- ----------
Total operating expenses 1,719 5,258 4,158 11,344
--------- ---------- --------- ----------
Operating loss (1,513) (1,655) (3,834) (4,132)
Financing income (expenses), net 50 863 (72) 1,060
--------- ---------- --------- ----------
Net loss $ (1,463)$ (792) $ (3,906) $ (3,072)
========= ========== ========= ==========
Net loss attributable to ordinary shareholders (1,463) (792) (3,906) (3,072)
Basic and diluted net loss per ordinary share $ (0.15)$ (0.04) $ (0.59) $ (0.21)
========= ========== ========= ==========
Weighted average number of ordinary shares outstanding 9,670,562 18,377,620 6,627,335 14,779,027
========= ========== ========= ==========
</TABLE>
(*) Pro-forma results are presented for informational purposes only.
Pro-forma financial results exclude the effect of stock-based non-cash deferred
compensation expense and exclude the effect of non-cash dividend related to
convertible preferred shares.
(MORE)
3
<PAGE>
<TABLE>
<CAPTION>
CERAGON NETWORKS RECORD Q3 RESULTS--4
BALANCE SHEET
(IN THOUSANDS OF U.S DOLLARS, EXCEPT PER SHARE DATA)
DECEMBER 31 SEPTEMBER 30
1999 2000
----------- ------------
(AUDITED) (Unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 1,149 83,893
Short-term deposits - 10,084
Trade receivables, net 1,851 6,588
Other receivables 688 3,032
Inventories 2,723 14,599
----------- ------------
Total current assets 6,411 118,196
----------- ------------
Property and equipment
Cost 1,963 5,655
Less - accumulated depreciation 673 1,125
----------- ------------
1,290 4,530
----------- ------------
Deposits with insurance companies 237 425
----------- ------------
Total assets $ 7,938 123,151
=========== ============
Current liabilities
Trade payables $ 1,850 7,766
Other payables and accrued expenses 1,196 3,124
----------- ------------
Total current liabilities 3,046 10,890
----------- ------------
Long-term liabilities
Loan from related party 1,173 -
Accrued severance pay 389 830
----------- ------------
Total long-term liabilities 1,562 830
----------- ------------
Total liabilities 4,608 11,720
----------- ------------
Commitments
Shareholders' equity
Share capital
Ordinary shares of NIS 0.01 par value:
Authorized - as of December 31, 1999 and September 30, 2000
17,500,000 and 57,500,000 shares respectively; issued and
outstanding as of December 31, 1999 and September 30, 2000 5,240,750 16 52
and 20,517,521 shares, respectively
Preferred shares of NIS 0.01 par value:
Authorized - as of December 31, 1999 and September 30, 2000
20,000,000 and none shares respectively; issued and
outstanding as of December 31, 1999 and September 30, 2000
5,052,000 and none shares, respectively 12 -
Additional paid-in capital 25,471 170,200
Deferred compensation (10,272) (14,462)
Accumulated deficit (11,897) (44,359)
----------- ------------
Total shareholders' equity 3,330 111,431
----------- ------------
Total liabilities and shareholders' equity $ 7,938 123,151
=========== ============
</TABLE>
(MORE)
4
<PAGE>
CERAGON NETWORKS RECORD Q3 RESULTS--5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)
For the three months For the nine months
ended September 30 ended September 30
-------------------- -------------------
1999 2000 1999 2000
---- ---- ---- ----
(Unaudited)
-----------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 1,307 $ 8,345 $ 2,166 $ 16,881
Cost of revenues 1,101 4,742 1,842 9,669
--------- ---------- --------- ----------
Gross profit before non-cash compensation 206 3,603 324 7,212
expense
Non cash compensation expense 17 170 48 437
--------- ---------- --------- ----------
Gross profit 189 3,433 276 6,775
--------- ---------- --------- ----------
Operating expenses
Research and development, net of non-cash
compensation expense of $49, $1,006, $123, 1,391 2,922 3,530 6,497
$2,526
Less: participation by the Chief
Scientist of the Government of Israel 394 598 1,096 1,761
--------- ---------- --------- ----------
Research and development, net 997 2,324 2,434 4,736
--------- ---------- --------- ----------
Marketing and selling, net of non-cash compensation
expense of $209, $818, $315, $2,333 580 2,393 1,389 5,438
General and administrative, net of non cash
compensation expense of $338, $769, $337,
$1,766 142 541 335 1,170
Amortization of deferred compensation 596 2,593 775 6,625
--------- ---------- --------- ----------
Total operating expenses 2,315 7,851 4,933 17,969
--------- ---------- --------- ----------
Operating loss (2,126) (4,418) (4,657) (11,194)
Financing income (expenses), net 50 863 (72) 1,060
--------- ---------- --------- ----------
Net loss $ (2,076)$ (3,555) $ (4,729) $ (10,134)
========= ========== ========= ==========
Dividend related to convertible preferred shares - - - (22,328)
Net loss attributable to ordinary shareholders (2,076) (3,555) (4,729) (32,462)
Basic and diluted net loss per ordinary share $ (0.21)$ (0.19) $ (0.71) $ (2.20)
========= ========== ========= ==========
Weighted average number of ordinary shares outstanding 9,670,562 18,377,620 6,627,335 14,779,027
========= ========== ========= ==========
</TABLE>
(MORE)
5
<PAGE>
CERAGON NETWORKS RECORD Q3 RESULTS--6
Certain statements concerning Ceragon's future prospects are
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There can be no assurances that future results will be achieved, and
actual results could differ materially from forecasts and estimates. Important
factors that could cause actual results to differ materially from forecasts and
estimates include: Ceragon's limited operating history and history of losses;
Ceragon's dependence on a limited number of key customers, independent
manufacturers and suppliers; Ceragon's ability to increase its manufacturing
capacity; and the demand for Ceragon's products. These risks and uncertainties,
as well as others, are discussed in greater detail in Ceragon's filings with the
Securities and Exchange Commission. Ceragon makes no commitment to revise or
update any forward-looking statements in order to reflect events or
circumstances after the date any such statement is made.
Contacts: Brad Ritter
GAJ Services Inc.
740-363-2141
[email protected]
-----------------------
Shimon Gal (Investors)
Ceragon Networks Ltd.
972-3-766-4295
[email protected]
--------------
Laura Yatim (Media)
Ceragon Networks Ltd.
972-3-765-7560
[email protected]
--------------
###
6
<PAGE>
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: November 2, 2000 By:/s/ SHIMON GAL
--------------------------------
Shimon Gal
Chief Financial Officer
