Airspan Networks Holdings Inc. Reports Third Quarter 2023 Results

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Last update: Nov 8, 2023

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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