Airspan Networks Holdings Inc. Reports Second Quarter 2023 Results

Rhea-AI Summary

Airspan Networks Holdings Inc. (NYSE American: MIMO) reported second quarter financial results, with revenue of $32.1 million, a gross margin of 21.0%, and a net loss of $33.6 million. Adjusted gross margin was 43.4% and adjusted net loss would have been $23.4 million. Adjusted EBITDA was a loss of $15.2 million. Loss per share was 45 cents.

Positive

• Revenue increased from the first quarter of 2023, but decreased compared to the second quarter of 2022.
• Gross margin decreased from the first quarter of 2023 and the second quarter of 2022.
• The company recorded an inventory impairment charge of $7.2 million in the second quarter of 2023.
• Total operating expenses decreased compared to the second quarter of 2022.
• Adjusted gross margin was 43.4%, indicating improvement after excluding the inventory impairment charge.
• Adjusted net loss would have been $23.4 million, showing a smaller loss after excluding the inventory impairment charge and restructuring provision.
• Adjusted EBITDA was a loss of $15.2 million, indicating a larger loss compared to the first quarter of 2023 and the second quarter of 2022.
• Loss per share was 45 cents, higher than the loss per share in the first quarter of 2023 and the second quarter of 2022.

Negative

• None.

BOCA RATON, Fla.--(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, 2023				December 31, 2022
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 June 30,								Six Months Ended June 30,
		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, 2023				March 31, 2023
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 June 30,
($ 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 June 30,						Three Months Ended March 31,
		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 June 30,						Three Months Ended June 30,
		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, 2023				March 31, 2023
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 June 30,
($ 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	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230809102833/en/

Investor Relations Contact:

Brett Scheiner

561-893-8660

IR@airspan.com

Media Contact:

mediarelations@airspan.com

Source: Airspan Networks Holdings Inc.

FAQ

What is the company name mentioned in the press release?

The company mentioned in the press release is Airspan Networks Holdings Inc.

What were the second quarter revenue and net loss?

The second quarter revenue was $32.1 million and the net loss was $33.6 million.

What was the adjusted gross margin?

The adjusted gross margin was 43.4%.

What was the adjusted net loss?

The adjusted net loss would have been $23.4 million.

What was the adjusted EBITDA?

The adjusted EBITDA was a loss of $15.2 million.

What was the loss per share?

The loss per share was 45 cents.