Airspan Networks Holdings Inc. Reports 2022 Results

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 full year and fourth quarter ended December 31, 2022.

Key Fourth Quarter Financial Highlights

• Revenue of $41.7 million, increased 1% sequentially from third quarter 2022, and decreased 17% year-over-year
• Gross margin of 46.1% was up from 39.8% in the third quarter 2022 and up from 41.1% in fourth quarter 2021
• Total operating expenses of $27.0 million compared to $33.1 million in third quarter 2022, and $37.5 million for fourth quarter 2021
• Net loss of $11.3 million, compared to a net loss of $23.3 million in third quarter 2022, and a net loss of $19.6 million for fourth quarter 2021
• Adjusted EBITDA (non-GAAP measure) was a loss of $5.0 million compared to a loss of $10.0 million in third quarter 2022 and a loss of $8.0 million in fourth quarter 2021
• Loss per share was 15 cents, compared to loss per share of 32 cents in third quarter 2022 and a loss per share of 27 cents in fourth quarter 2021

Key 2022 Financial Highlights

• Revenue of $167.3 million decreased 6% year-over-year
• Gross margin of 39.7% was down from 44.0% in 2021
• Total operating expenses of $134.4 million compared to $139.3 million in 2021
• Net loss of $85.4 million, compared to a net loss of $70.5 million for 2021
• Adjusted EBITDA (non-GAAP measure) was a loss of $45.2 million compared to a loss of $29.1 million in 2021
• Loss per share was $1.17 compared to a loss per share of $1.09 in 2021
  

Improved Operating Margins and Expense Control Drive Continued Adjusted EBITDA Improvement

• Adjusted EBITDA improved from a loss of $18.0 million in Q122 to a loss of $5.0 million in Q422 as a result of higher gross margins due to product mix and lower operating expenses recorded as a result of the reductions in headcount.

	Summary Results of Operations Adjusted for Share-based Compensation, Depreciation, Amortization and Restructuring costs
	($ in thousands)			Q122		Q222		Q322		Q422		2022
	Revenue		$	37,564	$	46,945	$	41,094	$	41,656	$	167,259
	Gross Profit			12,069		18,828		16,336		19,207		66,440
	Gross Margin			32.1%		40.1%		39.8%		46.1%		39.7%
	Adjusted Operating expenses (Non-GAAP)	(1)		29,608		28,977		25,114		23,719		107,418
	Adjusted Loss from Operations (Non-GAAP)	(2)		(17,539)		(10,149)		(8,778)		(4,512)		(40,978)
	Other expense, net			(506)		(2,126)		(1,177)		(452)		(4,261)
	Adjusted EBITDA (Non-GAAP)	(3)	$	(18,045)	$	(12,275)	$	(9,955)	$	(4,964)	$	(45,239)
(1)	The following table presents the reconciliation of Total Operating Expenses the most directly comparable GAAP measure, to Adjusted Operating expenses (Non-GAAP)
	($ in thousands)			Q122		Q222		Q322		Q422		2022
	Total Operating Expenses		$	37,293	$	37,103	$	33,094	$	26,959	$	134,449
	Adjusted for:
	Share-based compensation expense			(6,564)		(6,972)		(5,863)		(1,732)		(21,131)
	Depreciation and amortization			(1,121)		(1,154)		(1,173)		(1,174)		(4,622)
	Restructuring			-		-		(944)		(334)		(1,278)
	Adjusted Operating expenses (Non-GAAP)		$	29,608	$	28,977	$	25,114	$	23,719	$	107,418
(2)	The following table presents the reconciliation of Loss from Operations the most directly comparable GAAP measure, to Adjusted Loss from Operations (Non-GAAP)
	($ in thousands)			Q122		Q222		Q322		Q422		2022
	Loss from Operations		$	(25,224)	$	(18,275)	$	(16,758)	$	(7,752)	$	(68,009)
	Adjusted for:
	Share-based compensation expense			6,564		6,972		5,863		1,732		21,131
	Depreciation and amortization			1,121		1,154		1,173		1,174		4,622
	Restructuring			-		-		944		334		1,278
	Adjusted Loss from Operations (Non-GAAP)		$	(17,539)	$	(10,149)	$	(8,778)	$	(4,512)	$	(40,978)
(3)	The following table presents the reconciliation of Net loss the most directly comparable GAAP measure, to Adjusted EBITDA (Non-GAAP)
	($ in thousands)			Q122		Q222		Q322		Q422		2022
	Net loss		$	(29,738)	$	(21,017)	$	(23,314)	$	(11,313)	$	(85,382)
	Adjusted for:
	Interest expense			4,568		4,207		4,296		7,323		20,394
	Income tax benefit			(103)		(112)		163		(145)		(197)
	Depreciation and amortization			1,121		1,154		1,173		1,174		4,622
	EBITDA		$	(24,152)	$	(15,768)	$	(17,682)	$	(2,961)	$	(60,563)
	Share-based compensation expense			6,564		6,972		5,863		1,731		21,130
	Change in fair value of warrant liability and derivatives			(457)		(3,479)		920		(4,069)		(7,085)
	Restructuring costs			-		-		944		335		1,279
	Adjusted EBITDA (Non-GAAP)		$	(18,045)	$	(12,275)	$	(9,955)	$	(4,964)	$	(45,239)

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.

Source: Airspan Networks Holdings Inc.

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)
		December 31,
		2022				2021
ASSETS
Current assets:
Cash and cash equivalents		$	7,253			$	62,937
Restricted cash			34				185
Accounts receivable, net of allowance of $647 and $309 at December 31, 2022 and 2021, respectively			46,565				57,980
Inventory			18,556				17,217
Prepaid expenses and other current assets			17,289				18,833
Total current assets			89,697				157,152
Property, plant and equipment, net			7,351				7,741
Goodwill			13,641				13,641
Intangible assets, net			5,302				6,438
Right-of-use assets, net			5,697				6,585
Other non-current assets			3,407				3,942
Total assets		$	125,095			$	195,499
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable		$	26,173			$	29,709
Accrued expenses and other current liabilities			32,243				26,967
Deferred revenue			2,892				2,902
Senior term loan, current portion			40,529				3,187
Subordinated debt			11,119				10,577
Subordinated term loan - related party			41,528				-
Convertible debt			43,928				-
Current portion of long-term debt			259				275
Total current liabilities			198,671				73,617
Subordinated term loan - related party			-				37,991
Senior term loan			-				37,876
Convertible debt			-				41,343
Other long-term liabilities			7,223				20,924
Total liabilities			205,894				211,751
Commitments and contingencies (Note 15)
Stockholders' deficit:
Common stock, $0.0001 par value; 250,000,000 shares authorized; 74,283,026 and 72,335,952 shares issued and outstanding at December 31, 2022 and 2021, respectively			7				7
Additional paid-in capital			770,427				749,592
Accumulated deficit			(851,233	)			(765,851	)
Total stockholders' deficit			(80,799	)			(16,252	)
Total liabilities and stockholders' deficit		$	125,095			$	195,499

AIRSPAN NETWORKS HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for share data)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Revenues:
Products and software licenses		$	34,934			$	44,685			$	148,922			$	151,172
Maintenance, warranty and services			6,722				5,692				18,337				26,111
Total revenues			41,656				50,377				167,259				177,283
Cost of revenues:
Products and software licenses			20,588				28,837				95,335				95,442
Maintenance, warranty and services			1,861				849				5,484				3,870
Total cost of revenues			22,449				29,686				100,819				99,312
Gross profit			19,207				20,691				66,440				77,971
Operating expenses:
Research and development			13,133				15,923				61,377				63,350
Sales and marketing			5,028				8,682				30,587				33,839
General and administrative			8,179				12,631				40,070				40,878
Amortization of intangibles			284				294				1,136				1,191
Restructuring costs			335				-				1,279				-
Total operating expenses			26,959				37,530				134,449				139,258
Loss from operations			(7,752	)			(16,839	)			(68,009	)			(61,287	)
Interest expense, net			(7,323	)			(4,233	)			(20,394	)			(12,813	)
Change in fair value of warrant liability and derivatives, net			4,069				895				7,085				4,116
Gain on extinguishment of debt			-				-				-				2,096
Other (expense) income, net			(452	)			(743	)			(4,261	)			(3,328	)
Loss before income taxes			(11,458	)			(20,920	)			(85,579	)			(71,216	)
Income tax (expense) benefit, net			145				1,314				197				690
Net loss		$	(11,313	)		$	(19,606	)		$	(85,382	)		$	(70,526	)
Loss per share - basic and diluted		$	(0.15	)		$	(0.27	)		$	(1.17	)		$	(1.09	)
Weighted average shares outstanding - basic and diluted			74,108,665				72,183,563				72,782,773				64,509,718

AIRSPAN NETWORKS HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except for share data)
		Year Ended December 31,
		2022				2021
Cash flows from operating activities:
Net loss		$	(85,382	)		$	(70,526	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			4,622				4,294
Foreign exchange gain on long-term debt			(16	)			(14	)
Gain on extinguishment of debt			-				(2,096	)
Change in fair value of warrants and derivatives			(7,085	)			(7,940	)
Non-cash debt waiver and amendment fees			3,321				-
Share-based compensation expense			21,130				10,577
Loss on disposal of property, plant and equipment			-				22
Bad debt expense			638				289
Total adjustments			22,610				5,132
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable			10,777				12,352
(Increase) decrease in inventory			(1,339	)			(5,198	)
Decrease in prepaid expenses and other current assets			1,544				(6,547	)
Increase in other operating assets			535				(105	)
(Decrease) increase in accounts payable			(3,536	)			(10,790	)
Increase in deferred revenue			(10	)			(4,619	)
Increase in accrued expenses and other current liabilities			2,418				4,429
Increase in other long-term liabilities			(5,728	)			616
Increase in accrued interest on long-term debt			10,947				8,571
Net cash used in operating activities			(47,164	)			(66,685	)
Cash flows from investing activities:
Purchase of property, plant and equipment			(3,096	)			(6,033	)
Net cash used in investing activities			(3,096	)			(6,033	)
Cash flows from financing activities:
Repayments under senior term loan			(5,280	)			-
Payment for taxes withheld on stock awards			(295	)			-
Proceeds from the Business Combination, issuance of convertible debt and PIPE financing, net of issuance costs paid			-				115,501
Proceeds from the exercise of stock options			-				1,074
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			(5,575	)			117,222
Net (decrease) increase in cash, cash equivalents and restricted cash			(55,835	)			44,504
Cash, cash equivalents and restricted cash, beginning of year			63,122				18,618
Cash, cash equivalents and restricted cash, end of year		$	7,287			$	63,122

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

		Three Months Ended
($ in thousands)		December 31, 2022				September 30, 2022
Net loss		$	(11,313	)		$	(23,314	)
Adjusted for:
Interest expense, net			7,323				4,296
Income tax (benefit) expense, net			(145	)			163
Depreciation and amortization			1,174				1,173
EBITDA			(2,961	)			(17,682	)
Share-based compensation expense			1,731				5,863
Change in fair value of warrant liability and derivatives			(4,069	)			920	)
Restructuring costs			335				944
Adjusted EBITDA		$	(4,964	)		$	(9,955	)

		Three Months Ended December 31,
($ in thousands)		2022				2021
Net loss		$	(11,313	)		$	(19,606	)
Adjusted for:
Interest expense, net			7,323				4,233
Income tax (benefit) expense, net			(145				(1,314	)
Depreciation and amortization			1,174				1,177
EBITDA			(2,961	)			(15,510	)
Share-based compensation expense			1,731				8,427
Change in fair value of warrant liability and derivatives			(4,069	)			(895	)
Restructuring costs			335				-
Adjusted EBITDA		$	(4,964	)		$	(7,978	)

		Twelve Months Ended December 31,
($ in thousands)		2022				2021
Net loss		$	(85,382	)		$	(70,526	)
Adjusted for:
Interest expense, net			20,394				12,813
Income tax (benefit) expense, net			(197	)			(690	)
Depreciation and amortization			4,622				4,294
EBITDA			(60,563	)			(54,109	)
Share-based compensation expense			21,130				10,577
Change in fair value of warrant liability and derivatives			(7,085	)			(7,940	)
Restructuring costs			1,279				-
Transaction costs allocated to the warrants			-				3,824
Management Incentive Plan expense related to Business Combination			-				18,513
Adjusted EBITDA		$	(45,239	)		$	(29,135	)

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