 | fourth quarter 2014 highlights:
revenues $111.2 million, up 24% the fourth quarter of 2013, and up 12% the third quarter of 2014.
gross margin – 20.5%, which includes the impact of $4.4 million of one-time items, compared to 31.0% in the fourth quarter of 2013 and 25.6% in the third quarter of 2014.
operating loss – $(25.9) million, which includes the impact of $26.0 million of one-time items, compared to an operating loss of $(9.6) million in the fourth quarter of 2013 and an operating loss of $(0.8) million in the third quarter of 2014.
net loss – $(52.0) million or $(0.68) per diluted share, which includes $46.4 million of one-time items. net loss for the fourth quarter of 2013 was $(15.4) million, or $(0.35) per diluted share. net loss for the third quarter of 2014 was $(5.6) million or $(0.08) per diluted share.
one-time items – fourth quarter 2014 net loss includes a total of $46.4 million of one-time ges. this amount consists of $11.2 million in restructuring costs, including a $4.4 million write-off of discontinued product inventory and other one-time ges, a ge of $14.8 million for impairment of goodwill the nera acquisition, and additional financial expenses of $20.5 million resulting re-measurement of certain ass in venezuela denominated in or linked to the u.s. dollar.
non-gaap results –gross margin was 24.4%, operating profit was $0.9 million, and net loss was $(3.7) million, or $(0.05) per diluted share. non-gaap results exclude one-time items as well as recurring adjustments of $1.8 million. for a reconciliation of gaap to non-gaap results, see the attached s.
cash and cash equivalents – $41.4 million at december 31, 2014, compared to $43.9 million at september 30, 2014.
full year 2014 highlights:
revenues – $371.1 million, up 3% 2013.
gross margin – 23.6%, which includes the impact of $4.7 million of one-time items, compared to 31.0% in 2013.
operating loss – $(32.0) million, which includes $14.3 million of one-time items, compared to $(23.6) million in 2013.
net loss – $(76.5) million, or $(1.22) per diluted share, which includes $41.1 million of one-time items. net loss for 2013 was $(47.5) million, or $(1.23) per diluted share in 2013.
one-time items – full year 2014 net loss includes a total of $41.1 million one-time ges. this amount consists of $20.3 million of restructuring costs, including a $4.4 million write-off of discontinued product inventory and other onetime ges, a ge of $14.8 million for impairment of goodwill, primarily the nera acquisition, which was more than off by $16.8 million received as the result of a tlement agreement with eltek asa, and additional financial expenses of $24.6 million resulting a devaluation of the local currency in venezuela and re-measurement of certain ass denominated in or linked to the u.s. dollar, as well as $2.2 million related to transactions to expatriate cash venezuela and argentina.
non-gaap results – gross margin was 25.2%, operating loss was $(12.5) million, and net loss was $(25.2) million, or $(0.40) per diluted share. non-gaap results exclude one-time items and recurring adjustments of $10.3 million. for a reconciliation of gaap to non-gaap results, see the attached s.
“the significant sequential increase in our q4 revenue was the result of the strong order pattern india, mainly one large customer, which also impacted our gross margin,” said ira palti, president and ceo of ceragon. “primarily due to the completion of the major portion of the large orders india in 2014, we expect q1 revenues to be in the range of $90 to $100 million. we expect to begin a gradual improvement in non-gaap gross margin during the first quarter and, as our expense reduction measures begin to take effect, we also target an improvement in operating profit in the first quarter.
“as previously discussed, we are primarily focused on improving profitability and generating positive cash flow,” palti added. “our goal is to achieve a non-gaap net profit in q2 when our results reflect the full effect of our expense reduction measures, and as we continue to pursue other profit improvement initiatives.”
commenting on the company’s financial position, doron arazi, chief financial officer, said, “conducting our as impairment test, as required by gaap, resulted in an impairment ge of $14.8 million of goodwill, which caused us to be in breach of one of our equity-related loan covenants. we are engaged in constructive discussions with our lenders to address this issue while redefining our credit facility terms in a manner that will enable the company to address its expected cash needs, including certain relaxation of covenants, extension of term and certain gradual decrease of credit amount. we expect to finalize this agreement soon.”
doron arazi also added, “we are pleased with the progress we have made toward improving our working capital management. we continue to pursue our ongoing initiatives to control our working capital requirements and generate positive cash flow.”
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