Ceragon Networks Ltd. (NASDAQ: CRNT), the #1 wireless backhaul specialist today reported results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Highlights:

Revenues - $71.3 million, down 16.9% from the fourth quarter of 2018, and down 1.3% from the third quarter of 2019.

Gross margin – 31.7%, compared to 34.4% in the fourth quarter of 2018 and 32.2% in the third quarter of 2019.

Operating income (loss) - $(2.2) million, compared to operating income of $6.5 million in the fourth quarter of 2018, and operating income of $2.1 million in the third quarter of 2019.

Net income (loss) - $(4.1) million, or $(0.05) per diluted share for the fourth quarter of 2019, compared to net income of $11.6 million, or $0.14 per diluted share, in the fourth quarter of 2018. Net income for the third quarter of 2019 was $0.2 million, or $0.00 per diluted share.

Non-GAAP results – Gross margin was 31.3%, operating loss was $(2.1) million, and net loss was $(5.0) million, or $(0.06) per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Non-GAAP results excluding one-time items – Gross margin was 34.1%, operating income was $1.2 million, and net loss was $(1.7) million, or $(0.02) per diluted share.

Cash and cash equivalents - $23.9 million at December 31, 2019, compared to $20.5 million at September 30, 2019.

Full Year 2019 Highlights:

Revenues – $285.6 million, down 17.0% from 2018.

Gross margin – 33.9%, compared to 33.8% in 2018.

Operating income – $7.3 million, compared to an operating income of $26.1 million in 2018.

Net income (loss) – $(2.3) million, or $(0.03) per diluted share. Net income for 2018 was $23.0 million, or $ 0.28 per diluted share.

Non-GAAP results - gross margin was 33.8%, operating income was $9.0 million, and net income was $0.1 million, or $0.00 per diluted share. For reconciliation of GAAP to non-GAAP results, see the attached tables.

Non-GAAP results excluding one-time items – gross margin was 34.5%, operating income was $12.3 million, and net income was $3.4 million, or $0.04 per diluted share.

"Revenue in 2019 declined primarily due to region-specific issues affecting operators in India, causing a significant slowdown after several very strong years," said Ira Palti President and CEO of Ceragon. "Excluding India, revenue from the rest of the world increased by approximately 11% compared to 2018, and we believe we are gaining market share. The most significant accomplishment of 2019 was obtaining several important new 5G design wins, including one through a new relationship with a very large Tier 1 U.S. operator. Given the long planning and project cycles, these new design wins are likely to begin contributing meaningfully to revenue only in late 2020 and beyond.

"We are targeting revenue growth in 2020, although we are off to a slow start. We are expecting a sequential decline in Q1 revenue, based on a Q4 book-to-bill below 1:1 plus typical seasonal factors negatively affecting Q1. For the remaining quarters of the year, we continue to expect a $70-$75 million average quarterly revenue run rate, with a more favorable geographic mix leading to higher gross margin in 2020 versus 2019. We are also targeting better net income for 2020, as well as positive cash flow."

"Our outlook for the coming months, is clouded by the effects of the outbreak of the novel coronavirus in Asia and particularly in China. Our supply chain could be significantly impacted and our customers could be negatively affected. However, as the impact is too early to determine, we have not addressed it in our forward-looking statements.

"Looking forward beyond 2020," Mr. Palti added, "we have the only value proposition designed for our customers to unlock their 5G potential."

Supplemental geographical breakdown of revenue for:

Fourth quarter 2019: