Q4-2013 Financial Review

February 2014

Ceragon Networks proprietary and confidential

Safe Harbor Statement

This presentation may contain statements concerning Ceragons future prospects that are forwardlooking statements under the Private Securities Litigation Reform Act of 1995. These statements are
based on current expectations and projections that involve a number of risks and uncertainties. There can
be no assurance that future results will be achieved, and actual results could differ materially from
forecasts and estimates. These are important factors that could cause actual results to differ materially
from forecasts and estimates. Some of the factors that could significantly impact the forward-looking
statements in this presentation include risks associated with the impact of restructuring activities, risks
associated with continuing losses and possible liquidity issues, risks associated with the possibility that
new products will not be accepted in the market, the risk of significant expenses in connection with
potential contingent tax liability associated with Neras prior operations or facilities, and other risks and
uncertainties, which are discussed in greater detail in Ceragons Annual Report on Form 20-F and
Ceragons other filings with the Securities and Exchange Commission. Forward-looking statements speak
only as of the date on which they are made and Ceragon undertakes no commitment to revise or update
any forward-looking statement in order to reflect events or circumstances after the date any such
statement is made. Ceragons public filings are available from the Securities and Exchange
Commissions website at www.sec.gov or may be obtained on Ceragons website at www.ceragon.com .

Proprietary and Confidential

Revenues- Geographic Split

Q1/12

Q2/12

Q3/12

Q4/12

FY2012

Q1/13

Q2/13

Q3/13

Q4/13

FY2013

Europe

21%

19%

23%

25%

22%

19%

17%

18%

20%

18%

Africa

22%

17%

8%

6%

13%

13%

34%

23%

11%

20%

NorthAmerica

12%

9%

7%

8%

9%

9%

7%

10%

10%

9%

India

10%

18%

13%

7%

12%

8%

3%

11%

8%

8%

APAC

15%

10%

16%

22%

16%

13%

11%

9%

11%

11%

LatinAmerica

20%

27%

33%

32%

28%

38%

28%

29%

40%

34%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Total

12 months 2013

Q4/13

Europe,18%

Latin
America,40%

Latin
America,34%

Europe,20%

Africa,11%
Africa,20%
APAC,11%

N.America,
10%

India,8%

APAC,11%
N.America,
9%

India,8%

Directvs.OEM

Q3/11

Q4/11

Q1/12

Q2/12

Q3/12

Q4/12

Q1/13

Q2/13

Q3/13

Q4/13

%DIRECT

91%

97%

93%

78%

88%

95%

96%

89%

97%

96%

%OEM

9%

3%

7%

22%

12%

5%

4%

11%

3%

4%

Proprietary and Confidential

NON-GAAP Profit & Loss

Actual
(unaudited)

Q1/12
Revenues

Q2/12

Q3/12

Q4/12

110,046 112,669 117,087 106,849

Q1/13

Q2/13

Q3/13

Q4/13

90,097

90,084

92,099

89,492

CostofRevenues

74,940

75,385

78,149

71,307

61,342

60,940

62,708

60,761

Grossprofit

35,106

37,284

38,938

35,542

28,755

29,144

29,391

28,731

31.9%

33.1%

33.3%

33.3%

31.9%

32.4%

31.9

32.1

11,731

11,293

11,021

10,539

10,383

10,245

9,937

8,587

10.7%

10.0%

9.4%

9.9%

11.5%

11.4%

10.8%

9.6%

18,018

18,841

18,103

17,344

16,110

16,153

15,636

15,887

16.4%

16.7%

15.5%

16.2%

17.9%

17.9%

17.0%

17.8%

6,363

6,116

6,793

5,895

5,648

5,515

5,989

5,837

5.8%

5.4%

5.8%

5.5%

6.3%

6.1%

6.5%

6.5%

Totaloperatingexpenses

36,112

36,250

35,917

33,778

32,141

31,913

31,562

30,311

Operatingprofit(loss)

(1,006)

1,034

3,021

1,764

(3,386)

(2769)

(2,171)

(1,580)

Operatingmargin

(0.9%)

0.9%

2.6%

1.7%

(3.8%)

(3.1%)

(2.4%)

(1.8%)

Grossmargin

Research&Development
%R&D

Sales&Marketing
%S&M

General&Administration
%G&A

Proprietary and Confidential

Cash Flow
(U.S.dollarsinthousands)

Q1/12
Totalcash&cashinvestments

Cashflowfromoperations
Capitalexpenditures
OptionExercise

Q2/12

Q3/12

Q4/12

Q1/13

Q2/13

Q3/13

49,497

44,815

48,632

51,589

51,555

49,062

44,826

52,337

5,025

(14,002)

(899)

17,085

2,859

(8,824)

(7,445)

(16,102)

(3,303)

(3,065)

(3,845)

(4,317)

(2,895)

(4,802)

(4,009)

(4,717)

213

251

270

1,137

Publicoffering,net
Loansreceived(Repayment)
Other
NetChangeinCash

34,957
(2,058)

12,542

8,342

(10,058)

(1,058)

11,632

7,242

(4,358)

89

(408)

(51)

245

(77)

(507)

(24)

(2,269)*

(34)

(4,682)

3,817

2,957

(34)

(2,493)

(4,236)

7,511

(*) Mainly cost related to expatriation of cash from Argentina

5

Q4/13

Proprietary and Confidential

Selected data from balance sheet

(U.S.dollarsinthousands)
(Unaudited)

Q1/12

Inventory
InventoryDays
TradeReceivables
DSOs

Q2/12

Q3/12

Q4/12

Q1/13

Q2/13

Q3/13

Q4/13

76,594

75,297

64,098

65,554

62,660

57,663

57,438

64,239

85

86

73

78

78

76

81

94

139,325

160,364

177,539

149,120

128,655

122,641

128,766

131,166

112

128

141

122

110

111

124

132

Proprietary and Confidential

Reported Results Non GAAP

(U.S.dollarsinthousands)
(Unaudited)

Q1/12

Q2/12

Q3/12

110,046
74,940
35,106
11,731
18,018
6,363

112,669
75,385
37,284
11,293
18,841
6,116

117,087
78,149
38,938
11,021
18,103
6,793

106,849
71,307
35,542
10,539
17,344
5,895

Total Operating
Expenses

36,112

36,250

35,917

Operatingprofit(loss)

IncomeTax

(1,006)
(906)
(290)

1,034
(554)
(245)

NonGAAPNet
Income(loss)

(2,202)

NonGAAPEPS
#ofSharesfordiluted
EPS(000)

Revenues
CostofRevenues
Grossprofit
R&D Net
S&M
G&A

Financeexpenses

Q4/12 FY2012

Q1/13

Q2/13

Q3/13

Q4/13

FY2013

446,651
299,781
146,870
44,584
72,306
25,167

90,097
61,342
28,755
10,383
16,110
5,648

90,084
60,940
29,144
10,245
16,153
5,515

92,099
62,708
29,391
9,937
15,636
5,989

89,492
60,761
28,731
8,587
15,887
5,837

361,772
245,751
116,021
39,152
63,786
22,989

33,778

142,057

32,141

31,913

31,562

30,311

125,927

3,021
(1,149)
(261)

1,764
(938)
(405)

4,813
(3,547)
(1,201)

(3,386)
(1,496)
(818)

(2,769)
(2,247)
(658)

(2,171)
(1,980)
(362)

(1,580)
(1,842)
(664)

(9,906)
(7,565)
(2,502)

235

1,611

421

65

(5,700)

(5,674)

(4,513)

(4,086)

(19,973)

($0.06)

$0.01

$0.04

$0.01

$0.00

$(0.16)

$(0.15)

$(0.12)

$(0.09)

$(0.52)

36,346

37,380

37,092

36,642

37,093

36,756

36,806

36,816

43,640

38,520

Proprietary and Confidential

Reported Results Reconciliation to GAAP

(U.S.dollarsinthousands)
(Unaudited)
Q1/12

Q2/12

Q3/12

Q4/12

FY2012

Q1/13

Q2/13

Q3/13

Q4/13

FY2013

(2,202)

235

1,611

421

65

(5,700)

(5,674)

(4,513)

(4,086)

(19,973)

1,586

1,257

1,403

1,219

5,465

1,075

998

701

932

3,706

901

901

854

880

3,536

666

604

632

632

2,534

409

759

3,250

93

4,511

459

459

6,712

6,712

2,844

12,577

15,421

955

955

1,338

221

800

(82)

2,277

264

244

557

(7,461)

(6,396)

1,291

1,291

3,133

3,133

3,320

3,320

4,037

4,037

GAAPNetLoss

(7,391)

(2,903)

(4,696)

(8,401)

(23,391)

(14,141)

(7,520)

(10,440)

(15,377)

(47,478)

GAAPEPS

$(0.20)

$(0.08)

$(0.13)

$(0.23)

$(0.64)

$(0.38)

$(0.20)

$(0.28)

$(0.35)

$(1.23)

#ofSharesforbasicand
dilutedEPS(000)

36,346

36,421

36,496

36,565

36,458

36,756

36,806

36,816

43,640

38,520

NonGAAPNetIncome(loss)
Sharebasedcompensation
expense
Amortizationofintangible
assets
Inventorystepup
Restructuringexpenses
Integrationplanrelatedcosts
Changesinpreacquisition
indirecttax positions
Nonrecurringadjustmentof
pensionliabilities
Onetimedevaluationin
Venezuela
Nonrecurringcostrelatedto
expatriationofcashfrom
Argentina
Nonrecurringadjustmentof
valuationallowanceontax
assets

Proprietary and Confidential

Quarterly Revenue and Non-GAAP Net Income (Loss)

Revenue($mm)
140
120

110.3

116.1 118.5

110

112.7 117.1

100.3

106.8

100

90.1

80
56.8

60

43.9

42.2

44.7

53.4

59.7

60.9

62.3

90.1

92.1

89.5

66.9

40
20
0
Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

NonGAAPNetIncome($mm)
8
6
3.4

3.3

4.6

5.5

6.1
2.3

1.8
0.6

1.6
0.23

0.23

0
2
4

Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413
0.8
1.6
2

5.7

Proprietary and Confidential

5.67

4.51

4.1

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