Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Airspan Networks Holdings Inc. Reports Third Quarter 2022 Results


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, 2022.

Key Third Quarter Financial Highlights

Third Quarter Business Highlights

Strong Demand and New Product Pipeline

"We are encouraged by very robust bookings, while continuing to grapple with supply chain issues," said Airspan Chairman and Chief Executive Officer Eric Stonestrom. "We are taking steps to address the balance sheet, as well as driving operational efficiencies to bring us closer to operating break-even in the fourth quarter of this year."

"We are seeing continued strong demand in our core markets of mobile networks, private networks and fixed wireless. We have now launched the 6 Series, Fixed Wireless Access (FWA) product, which delivers multi-gigabit speeds and we have grown total FWA purchase orders by 75% year to date compared to the same time last year," said Airspan President and Chief Operating Officer Glenn Laxdal.

Business Outlook

We anticipate fourth quarter 2022 revenue of $49 million to $57 million at a gross margin of 42% to 46%. Both figures continue to be impacted by component availability, related expenses and challenges from COVID-19 restrictions in Asia.

Except as required by applicable securities laws, Airspan does not intend to make publicly available any update or other revision to these financial projections. Airspan has relied upon certain assumptions and estimates to develop these projections, including, among other things, assumptions about its order backlog and pipeline, customer adoption and subsequent expansion of 5G technologies, the mix of products sold, the performance of Airspan's outsourced supply chain and the costs of materials and services. These financial projections do not take into account any circumstances or events occurring after the date of this news release. Readers are cautioned not to place undue reliance on these financial projections. None of Airspan or any of its directors, officers, advisors or other representatives has made or makes any representation regarding ultimate performance compared to these financial projections or that these financial projections will be achieved.

Earnings Conference Call

A conference call with Airspan executives will be held on Thursday, November 10 at 8:30 am ET. It can be accessed through a toll-free dial-in, 1-877-589-7296, or 1-215-268-9906 (local), by requesting the Airspan call, as well as on the Airspan investor relations website, ir.airspan.com. An audio replay will be available on the Airspan investor relations site following the call.

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, fixed wireless access (FWA), 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.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, Airspan's plans, objectives, expectations and intentions with respect to future operations, products and services, projected financial performance, and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. Any such forward-looking statements are based upon the current beliefs and expectations of Airspan's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond Airspan's control.

Actual results, performance or achievements may differ materially, and potentially adversely, from any forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond Airspan's control, which may include, among other things: the risk of downturns and the possibility of rapid change in the highly competitive industry in which Airspan operates; changes in laws and regulations affecting Airspan's business; the risk that Airspan and its current and future collaborators are unable to successfully develop and commercialize Airspan's products or services, or experience significant delays in doing so; the risk that Airspan does not achieve or sustain profitability; the risk that Airspan will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; Airspan's ability to remain in compliance with the financial and other covenants under its debt agreements; Airspan's ability to continue as a going concern; the risk that Airspan experiences difficulties in managing its growth and expanding operations; the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations; the risk of product liability or regulatory lawsuits or proceedings relating to Airspan's products and services; and the risk that Airspan is unable to secure its intellectual property. For further information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of Airspan's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, and Airspan's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the US Securities and Exchange Commission. All information set forth herein speaks only as of the date hereof in the case of information about Airspan or the date of such information in the case of information from persons other than Airspan, and Airspan disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding Airspan's industry and end markets are based on sources it believes to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part.

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. 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,
2022

 

December 31,
2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

27,265

 

 

$

62,937

 

Restricted cash

 

 

43

 

 

 

185

 

Accounts receivable, net of allowance of $462 and $309 as of September 30, 2022 and December 31, 2021, respectively

 

 

42,195

 

 

 

57,980

 

Inventory

 

 

15,621

 

 

 

17,217

 

Prepaid expenses and other current assets

 

 

17,262

 

 

 

18,833

 

Total current assets

 

 

102,386

 

 

 

157,152

 

Property, plant and equipment, net

 

 

7,301

 

 

 

7,741

 

Goodwill

 

 

13,641

 

 

 

13,641

 

Intangible assets, net

 

 

5,586

 

 

 

6,438

 

Right-of-use assets, net

 

 

6,066

 

 

 

6,585

 

Other non-current assets

 

 

3,387

 

 

 

3,942

 

Total assets

 

$

138,367

 

 

$

195,499

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

25,814

 

 

$

29,709

 

Deferred revenue

 

 

3,553

 

 

 

2,902

 

Accrued expenses and other current liabilities

 

 

34,465

 

 

 

26,967

 

Senior term loan, current portion

 

 

40,791

 

 

 

3,187

 

Subordinated debt

 

 

10,981

 

 

 

10,577

 

Subordinated term loan ? related party

 

 

40,607

 

 

 

?

 

Convertible debt

 

 

43,258

 

 

 

?

 

Current portion of long-term debt

 

 

242

 

 

 

275

 

Total current liabilities

 

 

199,711

 

 

 

73,617

 

Subordinated term loan - related party

 

 

?

 

 

 

37,991

 

Senior term loan

 

 

?

 

 

 

37,876

 

Convertible debt

 

 

?

 

 

 

41,343

 

Other long-term liabilities

 

 

9,651

 

 

 

20,924

 

Total liabilities

 

 

209,362

 

 

 

211,751

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

Common stock, $0.0001 par value; 250,000,000 shares authorized; 73,393,907 and 72,335,952 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

768,918

 

 

 

749,592

 

Accumulated deficit

 

 

(839,920

)

 

 

(765,851

)

Total stockholders' deficit

 

 

(70,995

)

 

 

(16,252

)

Total liabilities and stockholders' deficit

 

$

138,367

 

 

$

195,499

 

AIRSPAN NETWORKS HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Products and software licenses

 

$

36,521

 

 

$

32,101

 

 

$

114,128

 

 

$

105,637

 

Maintenance, warranty and services

 

 

4,573

 

 

 

6,822

 

 

 

11,475

 

 

 

21,269

 

Total revenues

 

 

41,094

 

 

 

38,923

 

 

 

125,603

 

 

 

126,906

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Products and software licenses

 

 

23,462

 

 

 

20,652

 

 

 

74,747

 

 

 

66,272

 

Maintenance, warranty and services

 

 

1,296

 

 

 

1,163

 

 

 

3,623

 

 

 

3,354

 

Total cost of revenues

 

 

24,758

 

 

 

21,815

 

 

 

78,370

 

 

 

69,626

 

Gross profit

 

 

16,336

 

 

 

17,108

 

 

 

47,233

 

 

 

57,280

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

15,003

 

 

 

17,529

 

 

 

48,244

 

 

 

47,427

 

Sales and marketing

 

 

7,219

 

 

 

10,315

 

 

 

25,559

 

 

 

25,157

 

General and administrative

 

 

9,644

 

 

 

19,347

 

 

 

31,891

 

 

 

28,247

 

Amortization of intangibles

 

 

284

 

 

 

299

 

 

 

852

 

 

 

897

 

Restructuring costs

 

 

944

 

 

 

-

 

 

 

944

 

 

 

-

 

Total operating expenses

 

 

33,094

 

 

 

47,490

 

 

 

107,490

 

 

 

101,728

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(16,758

)

 

 

(30,382

)

 

 

(60,257

)

 

 

(44,448

)

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(4,296

)

 

 

(3,630

)

 

 

(13,071

)

 

 

(8,580

)

Gain on extinguishment of debt

 

 

?

 

 

 

?

 

 

 

?

 

 

 

2,096

 

Other (expense) income, net

 

 

(2,097

)

 

 

7,516

 

 

 

(793

)

 

 

636

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(23,151

)

 

 

(26,496

)

 

 

(74,121

)

 

 

(50,296

)

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit, net

 

 

(163

)

 

 

(457

)

 

 

52

 

 

 

(624

)

 

 

 

 

 

 

 

 

 

Net loss

 

$

(23,314

)

 

$

(26,953

)

 

$

(74,069

)

 

$

(50,920

)

 

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

 

$

(0.32

)

 

$

(0.41

)

 

$

(1.02

)

 

$

(0.82

)

Weighted average shares outstanding - basic and diluted

 

 

72,572,138

 

 

 

66,276,223

 

 

 

72,415,546

 

 

 

61,923,661

 

AIRSPAN NETWORKS HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except for share data)

 

 

 

 

 

 

 

 

Nine Months Ended
September 30,

 

 

2022

 

2021

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(74,069

)

 

$

(50,920

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

3,448

 

 

 

3,117

 

Foreign exchange gain on long-term debt

 

 

(33

)

 

 

(8

)

Bad debt expense

 

 

170

 

 

 

182

 

Gain on extinguishment of debt

 

 

?

 

 

 

(2,096

)

Change in fair value of warrants and derivatives

 

 

(3,016

)

 

 

(7,045

)

Non-cash debt amendment fee

 

 

463

 

 

 

?

 

Share-based compensation

 

 

19,399

 

 

 

2,150

 

Total adjustments

 

 

20,431

 

 

 

(3,700

)

Changes in operating assets and liabilities:

 

 

 

 

Decrease in accounts receivable

 

 

15,615

 

 

 

18,001

 

Decrease (increase) in inventory

 

 

1,596

 

 

 

(1,957

)

Decrease (increase) in prepaid expenses and other current assets

 

 

1,571

 

 

 

(452

)

Decrease in other non-current assets

 

 

555

 

 

 

6

 

Decrease in accounts payable

 

 

(3,895

)

 

 

(15,799

)

Increase (decrease) in deferred revenue

 

 

651

 

 

 

(2,476

)

Increase in accrued expenses

 

 

7,498

 

 

 

5,599

 

(Decrease) increase in other long-term liabilities

 

 

(7,738

)

 

 

468

 

Increase in accrued interest on long-term debt

 

 

8,160

 

 

 

5,917

 

Net cash used in operating activities

 

 

(29,625

)

 

 

(45,313

)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property, plant and equipment

 

 

(2,156

)

 

 

(4,287

)

Net cash used in investing activities

 

 

(2,156

)

 

 

(4,287

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from the Business Combination, issuance of convertible debt and PIPE financing, net of issuance costs paid

 

 

?

 

 

 

115,501

 

Repayments of senior term loan

 

 

(3,960

)

 

 

?

 

Proceeds from the exercise of stock options

 

 

?

 

 

 

78

 

Payment for taxes withheld on stock awards

 

 

(73

)

 

 

?

 

Proceeds from the sale of Series H stock, net

 

 

?

 

 

 

505

 

Proceeds from the issuance of Series H warrants

 

 

?

 

 

 

142

 

Net cash (used in) provided by financing activities

 

 

(4,033

)

 

 

116,226

 

 

 

 

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(35,814

)

 

 

66,626

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, beginning of year

 

 

63,122

 

 

 

18,618

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, end of period

 

$

27,308

 

 

$

85,244

 

The following tables present the reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA:

 

 

Three Months Ended

($ in thousands)

 

September
30, 2022

 

June 30,
2022

Net loss

 

$

(23,314

)

 

$

(21,017

)

 

 

 

 

 

Adjusted for:

 

 

 

 

Interest expense, net

 

 

4,296

 

 

 

4,207

 

Income tax expense (benefit), net

 

 

163

 

 

 

(112

)

Depreciation and amortization

 

 

1,173

 

 

 

1,154

 

EBITDA

 

 

(17,682

)

 

 

(15,768

)

Share-based compensation expense

 

 

5,863

 

 

 

6,972

 

Change in fair value of warrant liability and derivatives

 

 

920

 

 

 

(3,479

)

Restructuring costs

 

 

944

 

 

 

-

 

Adjusted EBITDA

 

$

(9,955

)

 

$

(12,275

)

 

 

Three Months Ended
September 30,

($ in thousands)

 

2022

 

2021

Net loss

 

$

(23,314

)

 

$

(26,953

)

 

 

 

 

 

Adjusted for:

 

 

 

 

Interest expense, net

 

 

4,296

 

 

 

3,630

 

Income tax expense, net

 

 

163

 

 

 

457

 

Depreciation and amortization

 

 

1,173

 

 

 

988

 

EBITDA

 

 

(17,682

)

 

 

(21,878

)

Share-based compensation expense

 

 

5,863

 

 

 

661

 

Change in fair value of warrant liability and derivatives

 

 

920

 

 

 

(11,562

)

Restructuring costs

 

 

944

 

 

 

-

 

Transaction costs allocated to the warrants

 

 

-

 

 

 

3,824

 

Management Incentive Plan expense related to Business Combination

 

 

-

 

 

 

18,513

 

Adjusted EBITDA

 

$

(9,955

)

 

$

(10,442

)

 


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