Ceragon Financial Metrics Q1-2013

May 2013

Q1-2013 Financial Review

Ceragon Networks proprietary and confidential

Proprietary and Confidential

Safe Harbor Statement

This presentation may contain statements concerning Ceragon’s future prospects that are “forward-

looking 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 press release include the risk of significant expenses in connection with potential

contingent tax liability associated with Nera’s prior operations or facilities, the risk that the combined

Ceragon and Nera business may not perform as expected, risks associated with increased working

capital needs, and other risks and uncertainties, which are discussed in greater detail in Ceragon’s

Annual Report on Form 20-F and Ceragon’s 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. Ceragon’s public filings are available from the

Securities and Exchange Commission’s website at www.sec.gov or may be obtained on Ceragon’s

website at www.ceragon.com .

2


Revenues-Geographic Split

3

FY 2011 Q1/12 Q2/12 Q3/12 Q4/12 FY 2012 Q1/13

Europe 24% 21% 19% 23% 25% 22% 19%

Africa 17% 22% 17% 8% 6% 13% 13%

North America 8% 12% 9% 7% 8% 9% 9%

India 10% 10% 18% 13% 7% 12% 8%

APAC 20% 15% 10% 16% 22% 16% 13%

Latin America 21% 20% 27% 33% 32% 28% 38%

Total 100% 100% 100% 100% 100% 100% 100%

Four rolling

quarters

Direct vs. OEM Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13

% DIRECT 90% 94% 91% 97% 93% 78% 88% 95% 96%

% OEM 10% 6% 9% 3% 7% 22% 12% 5% 4%

Europe, 22%

Africa, 13%

N. America,

9%India, 12%APAC, 16%

Latin

America,

28%

Q1-13/2013Europe,

19%

Africa, 13%

N. America,

9%

India, 8%APAC, 13%

Latin

America,

38%


NON-GAAP Profit & Loss

4

Actual

(unaudited)

Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13

Revenues 110,350 116,120 118,487 110,046 112,669 117,087 106,849 90,097

Cost of Revenues 75,128 78,667 79,356 74,940 75,385 78,149 71,307 61,342

Gross profit 35,222 37,453 39,131 35,106 37,284 38,938 35,542 28,755

Gross margin 31.9% 32.3% 33% 31.9% 33.1% 33.3% 33.3% 31.9%

Research &

Development 11,453 12,023 11,908 11,731 11,293 11,021 10,539 10,383

% R&D 10.4% 10.4% 10.0% 10.7% 10.0% 9.4% 9.9% 11.5%

Sales & Marketing 18,730 18,359 17,936 18,018 18,841 18,103 17,344 16,110

%S&M 17.0% 15.8% 15.1% 16.4% 16.7% 15.5% 16.2% 17.9%

General &

Administration 5,509 5,511 5,872 6,363 6,116 6,793 5,895 5,648

%G&A 5.0% 4.7% 5.0% 5.8% 5.4% 5.8% 5.5% 6.3%

Total operating

expenses35,692 35,893 35,716 36,112 36,250 35,917 33,778 32,141

Operating profit (loss) (470) 1,560 3,415 (1,006) 1,034 3,021 1,764 (3,386)

Operating margin (0.4%) 1.3% 3% (0.9%) 0.9% 2.6% 1.7% (3.8%)


Cash Flow

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(U.S. dollars in thousands)

Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13

Total cash & cash investments 45,939 49,531 49,497 44,815 48,632 51,589 51,555

Cash flow from operations (15,187) 7,436 5,025 (14,002) (899) 17,085 2,859

Capital expenditures (3,722) (4,696) (3,303) (3,065) (3,845) (4,317) (2,895)

Option Exercise 376 518 213 251 270 2 1,137

Loans received (Repayment) - - (2,058) 12,542 8,342 (10,058) (1,058)

Other 87 334 89 (408) (51) 245 (77)

Net Change in Cash (18,446) 3,592 (34) (4,682) 3,817 2,957 (34)


Selected data from balance sheet

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(Unaudited)

Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13

Inventory 95,925 93,465 76,594 75,297 64,098 65,554 62,660

Inventory Days 110 106 85 86 73 78 78

Trade Receivables 135,849 143,247 139,325 160,364 177,539 149,120 128,655

DSOs 114 117 112 128 141 122 110


Reported Results – Non GAAP

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(Unaudited)

FY 2011 Q1/12 Q2/12 Q3/12 Q4/12 FY 2012 Q1/13

Revenues 445,269 110,046 112,669 117,087 106,849 446,651 90,097

Cost of Revenues 300,984 74,940 75,385 78,149 71,307 299,781 61,342

Gross profit 144,285 35,106 37,284 38,938 35,542 146,870 28,755

R&D - Net 46,425 11,731 11,293 11,021 10,539 44,584 10,383

S&M 71,686 18,018 18,841 18,103 17,344 72,306 16,110

G&A 21,484 6,363 6,116 6,793 5,895 25,167 5,648

Total Operating Expenses 139,595 36,112 36,250 35,917 33,778 142,057 32,141

Operating profit (loss) 4,690 (1,006) 1,034 3,021 1,764 4,813 (3,386)

Finance expenses (2,024) (906) (554) (1,149) (938) (3,547) (1,496)

Income Tax (2,259) (290) (245) (261) (405) (1,201) (818)

Non GAAP Net Income (loss) 407 (2,202) 235 1,611 421 65 (5,700)

Non GAAP EPS $0.01 ($0.06) $0.01 $0.04 $0.01 $0.00 ($0.16)

# of Shares for diluted EPS

(‘000)37,523 36,346 37,380 37,092 36,642 37,093 36,756


Reported Results – Reconciliation to GAAP

8


(Unaudited)

FY 2011 Q1/12 Q2/12 Q3/12 Q4/12 FY 2012 Q1/13

Non GAAP Net Income (loss) 407 (2,202) 235 1,611 421 65 (5,700)

Share based compensation expense 6,564 1,586 1,257 1,403 1,219 5,465 1,075

Amortization of intangible assets 4,162 901 901 854 880 3,536 666

Inventory step up 15,442 409 759 3,250 93 4,511 459

Restructuring expenses 7,834 - - - 6,712 6,712 2,844

Acquisition related costs 4,919 - - - - - -

Integration plan related costs 15,140 955 - - - 955 -

Financial expenses related to one-time

currency devaluation in Venezuela 3,133

Changes in pre-acquisition indirect tax

positions- 1,338 221 800 (82) 2,277 264

GAAP Net Loss (53,654) (7,391) (2,903) (4,696) (8,401) (23,391) (14,141)

GAAP EPS ($1.49) ($0.20) ($0.08) ($0.13) ($0.23) (0.64) (0.38)

# of Shares for basic and diluted EPS

(‘000)35,975 36,346 36,421 36,496 36,565 36,458 36,756


Quarterly Revenue and Non-GAAP Net Income (Loss)

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55.2 58.1 56.8

43.9 42.2 44.753.4

59.7 60.9 62.366.9

100.3110.3

116.1 118.5110 112.7

117

106.5

90.1

0

20

40

60

80

100

120

140

Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13

Revenue($mm)

4.94.2

3.3

1 11.8

3.44

4.65.5

6.1

-0.8-1.6

0.6

2.3

-2

0.23

1.6

0.23

-5.7-8

-6

-4

-2

0

2

4

6

8

Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13

Non-GAAP Net Income($mm)

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Yoel Knoll – VP of Investor Relations

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www.ceragon.com NASDAQ: CRNT

Economy & Finance

Ceragon Financial Metrics Q1-2013