Airspan Networks Holdings Inc. Reports Third Quarter 2023 Results

Rhea-AI Summary

Airspan Networks Holdings Inc. (NYSE American: MIMO) announced its third-quarter results, including a gain on the sale of Mimosa Networks Inc to Radisys Corporation, providing $10.5 million in cash and reducing indebtedness by $40.0 million. Revenue decreased to $14.3 million from $32.1 million sequentially and $41.1 million year-over-year. Gross margin improved to 36.7% from 21.0% in the previous quarter. Total operating expenses decreased to $16.1 million from $27.5 million in the second quarter. Net income was $9.9 million, including a $28.6 million gain on sale of the Mimosa subsidiary.

Positive

• The gain on the sale of Mimosa Networks Inc to Radisys Corporation provided approximately $10.5 million of cash to the Company and reduced the Company’s indebtedness by approximately $40.0 million.
• Gross margin improved to 36.7% from 21.0% in the previous quarter.
• Net income was $9.9 million, including a $28.6 million gain on sale of the Company’s Mimosa subsidiary.

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 third quarter ended September 30, 2023.

Third Quarter Financial Highlights

• On August 11, 2023 Airspan Networks Holdings Inc. completed the previously announced sale of Mimosa Networks Inc to Radisys Corporation. The transaction resulted in a gain on the sale of $28.6 million. The proceeds from the sale provided approximately $10.5 million of cash to the Company and also reduced the Company’s indebtedness by approximately $40.0 million.
• Revenue of $14.3 million compared to $32.1 million sequentially from second quarter 2023, and from $41.1 million year-over-year from third quarter 2022.
• Gross margin of 36.7% compared to 21.0% in the second quarter 2023 and 39.8% in third quarter 2022. Excluding an inventory impairment charge of $7.2 million in second quarter 2023, the adjusted gross margin for the second quarter 2023 was 43.4% (non-GAAP measure).
• Total operating expenses of $16.1 million compared to $27.5 million in second quarter 2023, and $33.1 million for third quarter 2022. Total operating expenses for the second quarter 2023, included a $3.0 million restructuring provision, primarily related to headcount reductions.
• Net income of $9.9 million, compared to a net loss of $33.6 million in second quarter 2023, and a net loss of $23.3 million for third quarter 2022. For the third quarter 2023, net income includes a $28.6 million gain on sale of the Company’s Mimosa subsidiary. 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 $7.9 million compared to a loss of $15.2 million in second quarter 2023 and a loss of $10.0 million in third 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.
• Basic income per share was 13 cents, compared to a loss per share of 45 cents in the second quarter 2023 and a loss per share of 32 cents in the third 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)
		September 30, 2023				December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	8,173			$	7,253
Restricted cash			13				34
Accounts receivable, net of allowance of $692 and $647 at September 30, 2023 and December 31, 2022, respectively			11,066				46,565
Inventory			10,197				18,556
Prepaid expenses and other current assets			18,343				17,289
Total current assets			47,792				89,697
Property, plant and equipment, net			5,019				7,351
Goodwill			-				13,641
Intangible assets, net			-				5,302
Right-of-use assets, net			3,193				5,697
Other non-current assets			2,961				3,407
Total assets		$	58,965			$	125,095
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	11,081			$	26,173
Accrued expenses and other current liabilities			29,406				32,243
Deferred revenue			2,415				2,892
Senior term loan			41,545				40,529
Subordinated debt			11,540				11,119
Subordinated term loan – related party			44,386				41,528
Convertible debt			31,706				43,928
Current portion of long-term debt			257				259
Total current liabilities			172,336				198,671
Other long-term liabilities			4,409				7,223
Total liabilities			176,745				205,894
Commitments and contingencies (Note 13)
Stockholders’ deficit:
Common stock, $0.0001 par value; 250,000,000 shares authorized; 74,638,893 and 74,283,026 shares issued and outstanding at both September 30, 2023 and December 31, 2022			7				7
Additional paid-in capital			778,054				770,427
Accumulated deficit			(895,841	)			(851,233	)
Total stockholders’ deficit			(117,780	)			(80,799	)
Total liabilities and stockholders’ deficit		$	58,965			$	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 September 30,								Nine Months Ended September 30,
		2023				2022				2023				2022
Revenues:
Products and software licenses		$	11,335			$	36,521			$	61,120			$	114,128
Maintenance, warranty and services			2,924				4,573				10,035				11,475
Total revenues			14,259				41,094				71,155				125,603
Cost of revenues:
Products and software licenses			8,153				23,462				45,443				74,747
Maintenance, warranty and services			875				1,296				3,401				3,623
Total cost of revenues			9,028				24,758				48,844				78,370
Gross profit			5,231				16,336				22,311				47,233
Operating expenses:
Research and development			9,294				15,003				36,901				48,244
Sales and marketing			4,896				7,219				15,888				25,559
General and administrative			1,932				9,644				15,343				31,891
Amortization of intangibles			-				284				189				852
Restructuring costs			-				944				3,283				944
Total operating expenses			16,122				33,094				71,604				107,490
Loss from operations			(10,891	)			(16,758	)			(49,293	)			(60,257	)
Interest expense, net			(9,944	)			(4,296	)			(19,631	)			(13,071	)
Loss on extinguishment of debt			-				-				(8,281	)			-
Change in fair value of warrant liability and derivatives, net			1,913				(920	)			3,143				3,016
Gain on sale of Mimosa business			28,631				-				28,631				-
Other income (expense), net			122				(1,177	)			530				(3,809	)
Income (loss) before income taxes			9,831				(23,151	)			(44,901	)			(74,121	)
Income tax benefit (expense), net			57				(163	)			293				52
Net income (loss)		$	9,888			$	(23,314	)		$	(44,608	)		$	(74,069	)
Income (loss) per share - basic		$	0.13			$	(0.32	)		$	(0.60	)		$	(1.02	)
Income (loss) per share - diluted		$	0.12			$	(0.32	)		$	(0.60	)		$	(1.02	)
Weighted average shares outstanding - basic			74,605,474				72,572,138				74,554,552				72,415,546
Weighted average shares outstanding - diluted			80,141,678				72,572,138				74,554,552				72,415,546
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
		Nine Months Ended September 30,
		2023				2022
Cash flows from operating activities:
Net loss		$	(44,608	)		$	(74,069	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			2,507				3,448
Foreign exchange gain on long-term debt			(2	)			(33	)
Bad debt expense			360				170
Change in fair value of warrants and derivatives, net			(3,143	)			(3,016	)
Loss on extinguishment of debt			8,281				-
Non-cash debt amendment fee			-				463
Inventory impairment charge			7,215				-
Gain on sale of Mimosa business			(28,631	)			-
Share-based compensation			6,044				19,399
Total adjustments			(7,369	)			20,431
Changes in operating assets and liabilities:
Decrease in accounts receivable			18,755				15,615
(Increase) decrease in inventory			(968	)			1,596
(Increase) decrease in prepaid expenses and other current assets			(1,292	)			1,571
Decrease in other non-current assets			335				555
Decrease in accounts payable			(2,188	)			(3,895	)
(Decrease) increase in deferred revenue			(250	)			651
(Decrease) increase in accrued expenses and other current liabilities			(2,453	)			7,498
Increase (decrease) in other long-term liabilities			1,499				(7,738	)
Increase in accrued interest on long-term debt			9,165				8,160
Net cash used in operating activities			(29,374	)			(29,625	)
Cash flows from investing activities:
Purchase of property, plant and equipment			(1,125	)			(2,156	)
Proceeds from sale of Mimosa business			55,188				-
Net cash provided by (used in) investing activities			54,063				(2,156	)
Cash flows from financing activities:
Borrowings from senior term loan			20,000				-
Repayment of senior term loan			(24,930	)			(3,960	)
Repayment of convertible note			(16,783	)			-
Payment of debt issuance costs			(1,916	)			-
Payment of taxes withheld on stock awards			(161	)			(73	)
Net cash used in financing activities			(23,790	)			(4,033	)
Net increase (decrease) in cash, cash equivalents and restricted cash			899				(35,814	)
Cash, cash equivalents and restricted cash, beginning of year			7,287				63,122
Cash, cash equivalents and restricted cash, end of period		$	8,186			$	27,308
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The following tables present the reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA:
		Three Months Ended
($ in thousands)		Sept. 30, 2023				June 30, 2023
Net income (loss)		$	9,888			$	(33,607	)
Adjusted for:
Interest expense, net			9,944				5,153
Income tax benefit, net			(57	)			(154	)
Depreciation and amortization			735				720
EBITDA			20,510				(27,888	)
Share-based compensation expense			2,107				1,998
Change in fair value of warrant liability and derivatives			(1,913	)			(588	)
Loss on extinguishment of debt			-				8,281
Gain on sale of Mimosa			(28,631	)			-
Restructuring costs			-				3,023
Adjusted EBITDA		$	(7,927	)		$	(15,174	)
Inventory impairment charge			-				7,215
Adjusted EBITDA excluding inventory impairment charge		$	(7,927	)		$	(7,959	)

		Three Months Ended September 30,
($ in thousands)		2023				2022
Net income (loss)		$	9,888			$	(23,314	)
Adjusted for:
Interest expense, net			9,944				4,296
Income tax (benefit) expense, net			(57	)			163
Depreciation and amortization			735				1,173
EBITDA			20,510				(17,682	)
Share-based compensation expense			2,107				5,863
Change in fair value of warrant liability and derivatives			(1,913	)			920
Loss on extinguishment of debt			-				-
Gain on sale of Mimosa			(28,631	)			-
Restructuring costs			-				944
Adjusted EBITDA		$	(7,927	)		$	(9,955	)

The following table presents the reconciliation of gross margin to Adjusted gross margin:
($ in thousands)		Three Months Ended June 30,
		2023				%
Revenue		$	32,123			100.0
Cost of revenue			25,390			79.0
Gross margin			6,733			21.0
Inventory provision			7,215			22.4
Adjusted gross margin		$	13,948			43.4

The following table presents the reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted net loss:
		Three Months Ended
($ in thousands)		June 30, 2023
Net loss		$	(33,607	)
Adjusted for:
Restructuring costs			3,023
Inventory impairment charge			7,215
Adjusted net loss		$	(23,369	)

 

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Investor Relations Contact:

Brett Scheiner

561-893-8660

IR@airspan.com

Media Contact:

mediarelations@airspan.com

Source: Airspan Networks Holdings Inc.

FAQ

What were the third quarter financial highlights for Airspan Networks Holdings Inc. (MIMO)?

The third quarter financial highlights include a gain on the sale of Mimosa Networks Inc to Radisys Corporation, reducing the Company’s indebtedness by $40.0 million, and providing $10.5 million of cash.

What was the revenue for the third quarter of 2023?

The revenue for the third quarter of 2023 was $14.3 million, a decrease from $32.1 million sequentially and $41.1 million year-over-year.

What was the gross margin for the third quarter of 2023?

The gross margin for the third quarter of 2023 was 36.7%, an improvement from 21.0% in the previous quarter.

What was the net income for the third quarter of 2023?

The net income for the third quarter of 2023 was $9.9 million, including a $28.6 million gain on sale of the Company’s Mimosa subsidiary.