CERAGON networks reports first quarter 2009 financial results

TEL AVIV, Israel. - Ceragon Networks Ltd. (NASDAQ and TASE: CRNT), a leading provider of high-capacity LTE ready wireless backhaul solutions, today reported results for the first quarter which ended March 31, 2009.

Revenues for the first quarter of 2009 were $43.9 million, down 7% from $47.2 million for the first quarter of 2008 and down 23% from $56.8 million in the fourth quarter of 2008.

Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the first quarter of 2009 was $0.2 million or $0.01 per basic and diluted share, compared to net income of $4.3 million in the first quarter of 2008, or $0.12 per basic share and $0.11 per diluted share.

On a non-GAAP basis, net income for the first quarter, excluding $789,000 of equity-based compensation expenses, was $1.0 million, or $0.03 per basic and diluted share. Non-GAAP net income for the first quarter of 2008 was $4.9 million, or $0.13 per basic and diluted share (please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).

Gross margin on a GAAP basis in the first quarter of 2009 was 33.9% of revenues. Gross margin on a non-GAAP basis in the first quarter of 2009 was 34% of revenues.

Cash and cash investments at the end of the quarter were $93.5 million.

“Underlying long term growth drivers remain in place and we are encouraged by improving demand from expansion of GSM networks in India to accommodate record subscriber growth as well as signs of improving demand in North America ,” said Ira Palti, President and CEO of Ceragon. “At the same time, we are still cautious about the near term outlook due to poor visibility, lengthening sales cycles, and customers’ continuing focus on retaining cash. In this environment, our emphasis will continue to be on controlling costs and remaining as flexible as possible in order to react quickly, while preserving our capability to respond effectively when the pace of orders picks up.”

Supplemental revenue breakouts:

Geographical breakdown:

First quarter 2009

Asia Pacific 31%

Europe Middle-East and Africa 31%

North America 19%

Latin America 19%

A conference call discussing Ceragon’s results for the first quarter of 2009, will take place today, May 1, 2009, at 8:00 a.m. (EST). Investors are invited to join the Company’s teleconference by calling (800) 230-1074 or international (651) 291-5254 at 7:50 a.m. EST. 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: http://www.ceragon.com/ir_events.asp?lang=0

selecting the webcast link, and following the registration instructions.

If you are unable to join us live, the replay numbers are: (800) 475-6701 or international (320) 365-3844, access code 995370.

A replay of both the call and the webcast will be available through June 1, 2009.