Airspan Networks Holdings Inc. (NYSE American: MIMO) (“Airspan”
or the “Company”), 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
and nine months ended September 30, 2021.
Key Highlights
- Third quarter 2021 revenue of $38.9 million, up 8% from the
third quarter of 2020
- Third quarter growth driven by contributions from 5G, rapidly
expanding Private Networks pipeline of deployments and
collaborations and strong Fixed Wireless Access (“FWA”)
results
- Year to date revenue up 39% through September 2021, to $126.9
million versus the first three quarters of 2020
- Product and software licenses revenue up 29% for the third
quarter 2021, and up 76% year to date through September 2021 over
the prior year
- Strong demand from existing customers with all major customers
committed to new purchase orders; new purchase orders received from
new customers as well
- Third quarter 2021 gross margin of 44% compared to 48% in third
quarter 2020
- Mimosa by Airspan 6 Series product suite launch ushers in fixed
wireless gigabit era, with new generation of high-performing FWA
technologies to improve PTMP (“Point to Multi Point”) performance
and reliability; featuring up to 7 Gbps speeds; one-year lead on
the competition
- On August 13, 2021, completed business combination (the
“Business Combination”) with New Beginnings Acquisition Corp. This
Business Combination and a concurrent PIPE equity and convertible
debt raise produced $115.5 million in net cash proceeds
- As a result of the Business Combination, listed on the NYSE
American Exchange (Ticker: MIMO) on August 16, 2021
Third Quarter Details
Airspan reported strong demand from both existing customers and
new clients during the third quarter 2021. The Company received
multi-million-dollar purchase orders from several existing
customers, while also receiving purchase orders from new customers
during the quarter. A second domestic cable operator placed their
first purchase order with Airspan during the quarter.
Additional third quarter highlights included:
- The expansion of Airspan’s 5G solutions portfolio, including
new 5G indoor and outdoor solutions, and the company’s first 5G
CBRS products
- Strong FWA results following record June results
- With the launch of a new fixed wireless access gigabit
solution, the A6 Series, featuring speeds up to 7 Gbps, to improve
PTMP reliability and performance; the A6 can support over 200
subscribers, a 4X increase and the C6x radio is capable of
subscriber speeds of up to 1.75 Gbps, a major milestone. This
solution provides Airspan with a one-year lead over the
competition
- A rapidly expanding Private Networks pipeline of deployments
and collaborations – including working with IBM to accelerate 5G
Open RAN adoption in Europe via 5G testbeds in France and Germany
to develop innovative multi-vendor solutions for campus
networks
- Successful interoperability testing with Qualcomm Technologies
of an end-to-end 5G Stand Alone Network on 5G CBRS spectrum for the
first time, laying the groundwork for the launch of next generation
CBRS-based devices using Airspan 5G and Open RAN software and
hardware
- Hiring veteran industry executives to accelerate business
development in the United States and United Kingdom
Strong customer demand in the quarter was impacted by the supply
chain disruptions that are being experienced by many industries. In
particular, these disruptions delayed approximately $20 million of
product deliveries to Airspan’s largest customer in the third
quarter of 2021. Component procurement at elevated spot prices,
expedited shipping charges and higher shipping rates also stemmed
from global supply chain challenges. This had an approximate three
percentage point impact on Airspan’s gross margin in the third
quarter of 2021, which was 44%.
Loss per share for the third quarter 2021 was 41 cents, compared
to a loss of 17 cents in the third quarter 2020. Year to date loss
per share was 82 cents through September 2021, compared to 57 cents
for the same period in 2020. Adjusted EBITDA (non-GAAP measure) for
the third quarter 2021 was a loss of $10.4 million, compared to a
loss of $6.0 million in the third quarter 2020. Adjusted EBITDA
(non-GAAP measure) for the nine months ended September 30, 2021 was
a loss of $21.1 million, compared to a loss of $22.1 million in the
same period of 2020.
Airspan President and CEO Eric Stonestrom said, “We continue to
be confident in Airspan’s long-term success, growth strategy and
competitive positioning to take advantage of the tremendous total
addressable market available via our innovative 5G, Open RAN,
Private Networks and FWA solutions. Our new 6 series FWA solution
portfolio gives us a one-year advantage over the competition, and
demand for these solutions continues to grow significantly.
“We generated strong revenue growth through a series of new POs
from both new and existing customers – including one that covers a
technology leader’s 20+ campus locations – and an increase of
interest in our Private Network solutions. Our confidence is also
bolstered by the infrastructure legislation passed last week, in
addition to previously announced public sector-funded broadband
initiatives and funding,” said Stonestrom.
Of the 72,024,437 shares of Airspan common stock issued and
outstanding as of September 30, 2021, 44,951,960 shares, held by
certain of the Company’s large strategic partners, as well as
warrants to purchase 6,813,078 shares of Airspan common stock held
by these strategic partners (and the shares of Airspan common stock
issuable upon the exercise of such warrants), are restricted from
trading until February 13, 2022, and an additional 2,750,000 shares
originally purchased by New Beginnings Acquisition Corp.’s sponsor
are restricted from trading until August 16, 2022, in each case
subject to earlier release on the date on which the last reported
sale price of Airspan common stock equals or exceeds $12.50 per
share for any 20 trading days within any 30-day trading period. A
further 345,471 issued and outstanding shares of Airspan common
stock represent restricted stock that will vest on August 13,
2022.
About the Business Combination
On August 13, 2021, Airspan completed the Business Combination,
resulting in listing on the NYSE American Exchange under the ticker
symbol MIMO on August 16, 2022. The Business Combination and a
concurrent PIPE equity and debt raise produced $115.5 million in
net cash proceeds. Proceeds from the New Beginnings Acquisition
Corp trust account, net of redemptions of $15.2 million, $48.7
million raised in PIPE convertible note financing and $75.0 million
raised in PIPE equity financing totaled $138.9 million in gross
proceeds, which were reduced by $23.4 million in related fees and
expenses.
Business Outlook
Based on our current visibility into the fourth quarter 2021 our
financial outlook is planned to be as follows:
- Revenue of $54 million
- GAAP gross margin of 44%
In addition, we expect our full year 2022 revenue growth in the
range of 20-25% over 2021, accelerating through the year to an
annualized run rate in the range of $270 million -$300 million in
fourth quarter 2022, with a planned 47% gross margin for the full
year.
Except as required by applicable securities laws, the Company
does not intend to make publicly available any update or other
revision to these financial projections. The Company 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 the Company'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 today 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), and requesting the
Airspan call, as well as on the Airspan investor relations website,
ir.airspan.com/. An audio
replay of the conference call 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 may contain “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 and the timing of events
may differ materially from the results anticipated in these
forward-looking statements.
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 we operate; changes in laws and
regulations affecting our business; the risk that we and our
current and future collaborators are unable to successfully develop
and commercialize our products or services, or experience
significant delays in doing so; the risk that we do not achieve or
sustain profitability; the risk that we will need to raise
additional capital to execute our business plan, which may not be
available on acceptable terms or at all; the risk that we
experience difficulties in managing our 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 our products and services; and the risk that we are unable to
secure our 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 our Annual
Report on Form 10-K (as amended) filed with the U.S. Securities and
Exchange Commission (the “SEC”), or our registration statement on
Form S-1 as filed with the SEC on September 10, 2021. 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 we disclaim 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
we believe 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 GAAP. 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, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
85,058
$
18,196
Restricted cash
186
422
Accounts receivable, less allowance for
doubtful accounts of $243 at September 30, 2021 and $374 at
December 31, 2020
53,438
71,621
Inventory
13,976
12,019
Prepaid expenses and other current
assets
11,738
7,602
Total current assets
164,396
109,860
Property, plant and equipment, net
6,900
4,833
Goodwill
13,641
13,641
Intangible assets, net
6,732
7,629
Right-to-use lease asset, net
7,144
7,882
Other non-current assets
3,831
3,837
Total assets
$
202,644
$
147,682
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
$
24,700
$
36,849
Deferred revenue
5,045
7,521
Other accrued expenses
28,137
22,538
Subordinated debt
10,445
10,065
Current portion of long-term debt
281
298
Total current liabilities
68,608
77,271
Long-term debt
-
2,087
Other long-term liabilities
22,230
17,147
Senior term loan
39,978
36,834
Convertible debt
40,748
-
Subordinated term loan - related party
37,149
34,756
Total liabilities
208,713
168,095
Commitments and contingencies
Stockholders' deficit
Common stock, $0.0001 par value;
250,000,000 shares authorized; 72,024,437 and 59,710,047 shares
issued at September 30, 2021 and December 31, 2020
7
6
Additional paid-in capital
740,169
674,906
Accumulated deficit
(746,245
)
(695,325
)
Total stockholders' deficit
(6,069
)
(20,413
)
Total liabilities and stockholders'
deficit
$
202,644
$
147,682
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,
2021
2020
2021
2020
Revenues:
Products and software licenses
$
32,447
$
25,227
$
106,487
$
60,520
Maintenance, warranty and services
6,476
10,811
20,419
30,889
Total revenues
38,923
36,038
126,906
91,409
Cost of revenues:
Products and software licenses
20,990
17,344
66,605
41,179
Maintenance, warranty and services
825
1,349
3,021
3,446
Total cost of revenues
21,815
18,693
69,626
44,625
Gross profit
17,108
17,345
57,280
46,784
Operating expenses:
Research and development
17,529
13,239
47,427
38,952
Sales and marketing
10,315
7,051
25,157
21,464
General and administrative
19,347
4,043
28,247
11,990
Amortization of intangibles
299
596
897
1,374
Loss on sale of assets
—
—
—
22
Total operating expenses
47,490
24,929
101,728
73,802
Loss from operations
(30,382
)
(7,584
)
(44,448
)
(27,018
)
Interest expense, net
(3,630
)
(1,480
)
(8,580
)
(4,676
)
Gain on extinguishment of debt
—
—
2,096
—
Other income (expense), net
7,516
(685
)
636
(1,925
)
Loss before income taxes
(26,496
)
(9,749
)
(50,296
)
(33,619
)
Income tax expense
(457
)
(172
)
(624
)
(370
)
Net loss
$
(26,953
)
$
(9,921
)
$
(50,920
)
$
(33,989
)
Net loss per share - basic and diluted
$
(0.41
)
$
(0.17
)
$
(0.82
)
$
(0.57
)
Weighted average shares outstanding -
basic and diluted
66,276,223
59,710,047
61,923,661
59,710,047
AIRSPAN NETWORKS HOLDINGS
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2021
2020
Cash flows from operating activities:
Net loss
$
(50,920
)
$
(33,989
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
3,117
3,624
Foreign exchange gain on long-term
debt
(8
)
12
Share-based compensation
2,150
1,482
Gain on extinguishment of debt
(2,096
)
—
Bad debt expense
182
—
Total adjustments
3,345
5,118
Changes in operating assets and
liabilities:
(Increase) decrease in receivables
18,001
7,480
Decrease in inventory
(1,957
)
4,679
Decrease in prepaids and other current
assets
(452
)
836
(Decrease) increase in accounts
payable
(15,799
)
(6,238
)
Increase (decrease) in deferred
revenue
(2,476
)
568
Increase in other accrued expenses
5,599
483
(Decrease) increase in other operating
assets
6
86
(Decrease) increase in other long-term
liabilities
(6,577
)
2,842
Accrued interest on long-term debt
5,917
2,677
Net cash used in operating activities
(45,313
)
(15,458
)
Cash flows from investing activities:
Purchase of property, plant and
equipment
(4,287
)
(1,159
)
Net cash used in investing activities
(4,287
)
(1,159
)
Cash flows from financing activities:
(Repayments) borrowings under line of
credit, net
—
(237
)
Proceeds from the Business Combination
115,501
—
Proceeds from the exercise of stock
options
78
—
Borrowings from other long-term debt
—
2,073
Proceeds from sale of Series G and G-1
stock, net
—
21,913
Proceeds from sale of Series H and H-1
stock, net
505
—
Proceeds from the issuance of Series H
warrants
142
—
Net cash provided by financing
activities
116,226
23,749
Increase in cash and cash equivalents
66,626
7,132
Cash, cash equivalents and restricted
cash, beginning of period
18,618
3,013
Cash, cash equivalents and restricted
cash, end of period
$
85,244
$
10,145
AIRSPAN NETWORKS HOLDINGS
INC.
UNAUDITED NON-GAAP ADJUSTED
EBITDA RECONCILIATION
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net Loss
$
(26,953
)
$
(9,921
)
$
(50,920
)
$
(33,989
)
Adjusted for:
Interest expense, net
3,630
1,480
8,580
4,676
Income tax (benefit) expense
457
172
624
370
Depreciation and amortization
988
1,278
3,117
3,624
EBITDA
(21,878
)
(6,991
)
(38,599
)
(25,319
)
Share-based compensation expense
661
495
2,150
1,482
Change in fair value of warrant liability
and derivatives
(11,562
)
692
(7,045
)
1,756
Transaction costs allocated to the
warrants
3,824
–
3,824
–
Management incentive plan
18,513
–
18,513
–
Adjusted EBITDA
$
(10,442
)
$
(5,804
)
$
(21,157
)
$
(22,081
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211110005562/en/
Investor Relations Contact: Brett Scheiner 561-893-8660
IR@airspan.com
Media Contact: Howie Waterman 917-359-5505
hwaterman@airspan.com
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