Airspan Networks Holdings Inc. Reports Second Quarter 2023 Results
BOCA RATON, Fla., August 09, 2023--(BUSINESS WIRE)--Airspan Networks Holdings Inc. (NYSE American: MIMO), which provides ground-breaking, disruptive software and hardware for 5G networks, and a pioneer in end-to-end Open RAN solutions, today announced results for the second quarter ended June 30, 2023.
Second Quarter Financial Highlights
Revenue of $32.1 million, compared to $24.8 million sequentially from first quarter 2023, and from $46.9 million year-over-year from second quarter 2022.
Gross margin of 21.0% compared to 41.8% in the first quarter 2023 and 40.1% in second quarter 2022. In the second quarter 2023, the Company recorded an inventory impairment charge of $7.2 million related to product initiatives that were either reduced or eliminated as a result of a headcount reduction. Excluding this impairment, the adjusted gross margin was 43.4% (non-GAAP measure).
Total operating expenses of $27.5 million compared to $28.0 million in first quarter 2023, and $37.1 million for second quarter 2022. Total operating expenses for the second quarter 2023, include a $3.0 million restructuring provision, primarily related to headcount reductions.
Net loss of $33.6 million, compared to a net loss of $20.9 million in first quarter 2023, and a net loss of $21.0 million for second quarter 2022. For the second quarter 2023, excluding the inventory impairment charge of $7.2 million and the restructuring provision of $3.0 million, the adjusted net loss would have been $23.4 million (non-GAAP measure).
Adjusted EBITDA (non-GAAP measure) was a loss of $15.2 million compared to a loss of $13.8 million in first quarter 2023 and a loss of $12.3 million in second quarter 2022. For the second quarter 2023, excluding the inventory impairment of $7.2 million, the adjusted EBITDA would have been a loss of $8.0 million.
Loss per share was 45 cents, compared to loss per share of 28 cents in first quarter 2023 and a loss per share of 29 cents in second quarter 2022.
About Airspan
Airspan Networks Holdings Inc. (NYSE American: MIMO) is a U.S.-based provider of groundbreaking, disruptive software and hardware for 5G networks, and a pioneer in end-to-end Open RAN solutions that provide interoperability with other vendors. As a result of innovative technology and significant R&D investments to build and expand 5G solutions, Airspan believes it is well-positioned with 5G indoor and outdoor, Open RAN, private networks for enterprise customers and industrial use applications, Air To Ground, and CBRS solutions to help mobile network operators of all sizes deploy their networks of the future, today. With over one million cells shipped to 1,000 customers in more than 100 countries, Airspan has global scale. For more information, visit www.airspan.com.
Non-GAAP Measures
This news release references non-GAAP measures. Non-GAAP measures do not have a standardized meaning and are, therefore, unlikely to be comparable to similar measures presented by other companies. We reference these non-GAAP financial measures in our decision making because they provide supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and we believe they provide investors with greater transparency to evaluate operational activities and financial results. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with US generally accepted accounting principles. Non-GAAP financial measures referred to in this report are labeled as "non-GAAP measure."
AIRSPAN NETWORKS HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for share data) | ||||||||
June 30, | December 31, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,102 | $ | 7,253 | ||||
Restricted cash | 35 | 34 | ||||||
Accounts receivable, net of allowance of $478 and $647 at June 30, 2023 and December 31, 2022, respectively | 22,790 | 46,565 | ||||||
Inventory | 10,592 | 18,556 | ||||||
Prepaid expenses and other current assets | 16,159 | 17,289 | ||||||
Assets held for sale -- current | 15,352 | - | ||||||
Total current assets | 75,030 | 89,697 | ||||||
Property, plant and equipment, net | 5,686 | 7,351 | ||||||
Goodwill | - | 13,641 | ||||||
Intangible assets, net | - | 5,302 | ||||||
Right-of-use assets, net | 3,711 | 5,697 | ||||||
Other non-current assets | 3,059 | 3,407 | ||||||
Assets held for sale – non-current | 20,913 | - | ||||||
Total assets | $ | 108,399 | $ | 125,095 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 17,393 | $ | 26,173 | ||||
Accrued expenses and other current liabilities | 31,247 | 32,243 | ||||||
Deferred revenue | 1,547 | 2,892 | ||||||
Senior term loan, current portion | 4,179 | 40,529 | ||||||
Subordinated debt | 11,396 | 11,119 | ||||||
Subordinated term loan – related party | - | 41,528 | ||||||
Convertible debt | - | 43,928 | ||||||
Current portion of long-term debt | 265 | 259 | ||||||
Liabilities held for sale -- current | 12,015 | - | ||||||
Total current liabilities | 78,042 | 198,671 | ||||||
Subordinated term loan - related party | 43,402 | - | ||||||
Senior term loan | 59,045 | - | ||||||
Convertible debt | 47,749 | - | ||||||
Other long-term liabilities | 9,561 | 7,223 | ||||||
Liabilities held for sale – non-current | 375 | - | ||||||
Total liabilities | 238,174 | 205,894 | ||||||
Commitments and contingencies (Note 13) | ||||||||
Stockholders’ deficit: | ||||||||
Common stock, $0.0001 par value; 250,000,000 shares authorized; 74,582,992 and 74,283,026 shares issued and outstanding at both June 30, 2023 and December 31, 2022 | 7 | 7 | ||||||
Additional paid-in capital | 775,947 | 770,427 | ||||||
Accumulated deficit | (905,729 | ) | (851,233 | ) | ||||
Total stockholders’ deficit | (129,775 | ) | (80,799 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 108,399 | $ | 125,095 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
AIRSPAN NETWORKS HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues: | ||||||||||||||||
Products and software licenses | $ | 28,855 | $ | 44,028 | $ | 49,788 | $ | 77,604 | ||||||||
Maintenance, warranty and services | 3,268 | 2,917 | 7,108 | 6,905 | ||||||||||||
Total revenues | 32,123 | 46,945 | 56,896 | 84,509 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Products and software licenses | 23,998 | 26,864 | 37,292 | 51,337 | ||||||||||||
Maintenance, warranty and services | 1,392 | 1,253 | 2,524 | 2,275 | ||||||||||||
Total cost of revenues | 25,390 | 28,117 | 39,816 | 53,612 | ||||||||||||
Gross profit | 6,733 | 18,828 | 17,080 | 30,897 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 13,416 | 16,720 | 27,607 | 33,241 | ||||||||||||
Sales and marketing | 5,310 | 9,010 | 10,992 | 18,340 | ||||||||||||
General and administrative | 5,746 | 11,089 | 13,411 | 22,247 | ||||||||||||
Amortization of intangibles | - | 284 | 189 | 568 | ||||||||||||
Restructuring costs | 3,023 | - | 3,283 | - | ||||||||||||
Total operating expenses | 27,495 | 37,103 | 55,482 | 74,396 | ||||||||||||
Loss from operations | (20,762 | ) | (18,275 | ) | (38,402 | ) | (43,499 | ) | ||||||||
Interest expense, net | (5,153 | ) | (4,207 | ) | (9,687 | ) | (8,775 | ) | ||||||||
Loss on extinguishment of debt | (8,281 | ) | - | (8,281 | ) | - | ||||||||||
Change in fair value of warrant liability and derivatives, net | 588 | 3,479 | 1,230 | 3,936 | ||||||||||||
Other income (expense), net | (153 | ) | (2,126 | ) | 408 | (2,632 | ) | |||||||||
Loss before income taxes | (33,761 | ) | (21,129 | ) | (54,732 | ) | (50,970 | ) | ||||||||
Income tax benefit (expense), net | 154 | 112 | 236 | 215 | ||||||||||||
Net loss | $ | (33,607 | ) | $ | (21,017 | ) | $ | (54,496 | ) | $ | (50,755 | ) | ||||
Loss per share - basic and diluted | $ | (0.45 | ) | $ | (0.29 | ) | $ | (0.73 | ) | $ | (0.70 | ) | ||||
Weighted average shares outstanding - basic and diluted | 74,582,992 | 72,335,952 | 74,528,668 | 72,335,952 | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||||||||||
AIRSPAN NETWORKS HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (54,496 | ) | $ | (50,755 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,772 | 2,275 | ||||||
Foreign exchange loss (gain) on long-term debt | 6 | (16 | ) | |||||
Bad debt expense | 172 | 7 | ||||||
Change in fair value of warrants and derivatives, net | (1,230 | ) | (3,936 | ) | ||||
Loss on extinguishment of debt | 8,281 | - | ||||||
Non-cash debt amendment fee | - | 463 | ||||||
Inventory impairment charge | 7,215 | - | ||||||
Share-based compensation | 3,937 | 13,536 | ||||||
Total adjustments | 20,153 | 12,329 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in accounts receivable | 12,539 | 9,706 | ||||||
Increase in inventory | (1,496 | ) | (302 | ) | ||||
Decrease in prepaid expenses and other current assets | 975 | 2,221 | ||||||
Decrease in other non-current assets | 238 | 181 | ||||||
Increase (decrease) in accounts payable | 1,611 | (3,040 | ) | |||||
(Decrease) increase in deferred revenue | (1,118 | ) | 1,686 | |||||
Decrease in accrued expenses and other current liabilities | (623 | ) | (65 | ) | ||||
Increase in other long-term liabilities | 4,220 | 151 | ||||||
Increase in accrued interest on long-term debt | 5,825 | 5,394 | ||||||
Net cash used in operating activities | (12,172 | ) | (22,494 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of property, plant and equipment | (1,122 | ) | (1,632 | ) | ||||
Net cash used in investing activities | (1,122 | ) | (1,632 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings from senior term loan | 19,981 | - | ||||||
Repayment of senior term loan | (1,760 | ) | (2,640 | ) | ||||
Payment of debt issuance costs | (1,916 | ) | - | |||||
Payment of taxes withheld on stock awards | (161 | ) | - | |||||
Net cash provided by (used in) financing activities | 16,144 | (2,640 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,850 | (26,766 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of year | 7,287 | 63,122 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 10,137 | $ | 36,356 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
The following tables present the reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA: | ||||||||
Three Months Ended | ||||||||
($ in thousands) | June 30, | March 31, | ||||||
Net loss | $ | (33,607 | ) | $ | (20,889 | ) | ||
Adjusted for: | ||||||||
Interest expense, net | 5,153 | 4,534 | ||||||
Income tax benefit, net | (154 | ) | (82 | ) | ||||
Depreciation and amortization | 720 | 1,052 | ||||||
EBITDA | (27,888 | ) | (15,385 | ) | ||||
Share-based compensation expense | 1,998 | 1,939 | ||||||
Change in fair value of warrant liability and derivatives | (588 | ) | (642 | ) | ||||
Loss on extinguishment of debt | 8,281 | - | ||||||
Restructuring costs | 3,023 | 260 | ||||||
Adjusted EBITDA | $ | (15,174 | ) | $ | (13,828 | ) | ||
Inventory impairment charge | 7,215 | - | ||||||
Adjusted EBITDA excluding inventory impairment charge | $ | (7,959 | ) | $ | (13,828 | ) | ||
Three Months Ended | ||||||||
($ in thousands) | 2023 | 2022 | ||||||
Net loss | $ | (33,607 | ) | $ | (21,017 | ) | ||
Adjusted for: | ||||||||
Interest expense, net | 5,153 | 4,207 | ||||||
Income tax (benefit) expense, net | (154 | ) | (112 | |||||
Depreciation and amortization | 720 | 1,154 | ||||||
EBITDA | (27,888 | ) | (15,768 | ) | ||||
Share-based compensation expense | 1,998 | 6,972 | ||||||
Change in fair value of warrant liability and derivatives | (588 | (3,479 | ) | |||||
Loss on extinguishment of debt | 8,281 | - | ||||||
Restructuring costs | 3,023 | - | ||||||
Adjusted EBITDA | $ | (15,174 | ) | $ | (12,275 | ) | ||
Inventory impairment charge | 7,215 | - | ||||||
Adjusted EBITDA excluding inventory impairment charge | $ | (7,959 | ) | $ | (12,275 | ) | ||
The following tables present the reconciliation of gross profit to Adjusted gross profit: | ||||||||||||
($ in thousands) | Three Months Ended | Three Months Ended | ||||||||||
2023 | % | 2023 | % | |||||||||
Revenue | $ | 32,123 | 100.0 | $ | 24,773 | 100.0 | ||||||
Cost of revenue | 25,390 | 79.0 | 14,426 | 58.2 | ||||||||
Gross profit | 6,733 | 21.0 | 10,347 | 41.8 | ||||||||
Inventory provision | 7,215 | 22.4 | - | - | ||||||||
Adjusted gross profit | $ | 13,948 | 43.4 | $ | 10,347 | 41.8 | ||||||
($ in thousands) | Three Months Ended | Three Months Ended | |||||||||
2023 | % | 2022 | % | ||||||||
Revenue | $ | 32,123 | 100.0 | $ | 46,945 | 100.0 | |||||
Cost of revenue | 25,390 | 79.0 | 28,117 | 59.9 | |||||||
Gross profit | 6,733 | 21.0 | 18,828 | 40.1 | |||||||
Inventory provision | 7,215 | 22.4 | 274 | 0.6 | |||||||
Adjusted gross profit | $ | 13,948 | 43.4 | $ | 19,102 | 40.7 | |||||
The following tables present the reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted net loss: | ||||||||
Three Months Ended | ||||||||
($ in thousands) | June 30, | March 31, | ||||||
Net loss | $ | (33,607 | ) | $ | (20,889 | ) | ||
Adjusted for: | ||||||||
Restructuring costs | 3,023 | 260 | ||||||
Inventory impairment charge | 7,215 | - | ||||||
Adjusted net loss | $ | (23,369 | ) | $ | (20,629 | ) | ||
Three Months Ended | ||||||||
($ in thousands) | 2023 | 2022 | ||||||
Net loss | $ | (33,607 | ) | $ | (21,017 | ) | ||
Adjusted for: | ||||||||
Restructuring costs | 3,023 | - | ||||||
Inventory impairment charge | 7,215 | - | ||||||
Adjusted net loss | $ | (23,369 | ) | $ | (21,017 | ) | ||
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Contacts
Investor Relations Contact:
Brett Scheiner
561-893-8660
IR@airspan.com
Media Contact:
mediarelations@airspan.com
