MIMO Airspan Networks Holdings Inc

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

)

   

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231108301296/en/

Investor Relations Contact: Brett Scheiner 561-893-8660 IR@airspan.com

Media Contact: mediarelations@airspan.com