Cambium Networks Corp
For the period ended Feb 15, 2024. Filed Feb 15, 2024.
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Feb 15, 2024 · Filed Feb 15, 2024
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Contents
EX-99.1 · Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of the federal securities laws, including statements concerning our expected next quarter revenues, net income and cash. All statements other than statements of historical fact contained in this document, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The forward-looking statements in this document are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this document and are subject to a number of risks, uncertainties and assumptions including those described in the “Risk factors” section of our 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2023, and Form 10-Qs filed on May 9, 2023, August 2, 2023, and November 3, 2023. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include: the unpredictability of our operating results; our inability to predict and respond to emerging technological trends and network operators’ changing needs; the impact of political tensions between the United States and other countries such as the war between Russia and Ukraine, tensions with China and the evolving events in Israel and Gaza; the strength of the dollar and the impact on the cost of our products globally; current or future unfavorable economic conditions, both domestically and in our foreign markets, including the risk of a global or localized recession; our inability to predict and respond to emerging technological trends and network operators’ changing needs; the impact of competitive pressures on the development of our new products; the impact of actual or threatened health epidemics and other outbreaks; our limited or sole source suppliers’ inability to acquire or produce third-party components to build our products and the impact of supply shortages, extended lead times or changes in supply or cost of components needed to manufacture our products; our ability to effectively forecast demand or manage our inventory, including our channel inventory, which may cause us to record write-downs for excess or obsolete inventory; our reliance on third-party manufacturers, which subjects us to risks of product delivery delays and reduced control over product costs and quality; our reliance on distributors and value-added resellers for the substantial majority of our sales; the inability of our third-party logistics and warehousing providers to deliver products to our channel partners and network operators in a timely manner; or our distributors’ and channel partners’ inability to attract new network operators or sell additional products to network operators that currently use our products; the technological complexity of our products, which may contain undetected hardware defects or software bugs or subject our products to the risks of ransomware or malware or other cyber-attack; our channel partners’ inability to effectively manage inventory of our products, timely resell our products or estimate expected future demand; and current or future unfavorable economic conditions, both domestically and in foreign markets.
Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
| CAMBIUM NETWORKS CORPORATION | |||||
|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| (In thousands, except share and per share amounts) | |||||
| (Unaudited) | |||||
| Three months ended · Year ended | |||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |
| Revenues | $40,206 | $43,046 | $84,507 | $220,195 | $296,899 |
| Cost of revenues | 48,934 | 32,087 | 43,138 | 149,062 | 151,759 |
| Gross profit | (8,728) | 10,959 | 41,369 | 71,133 | 145,140 |
| Gross margin | -21.7% | 25.5% | 49.0% | 32.3% | 48.9% |
| Operating expenses | |||||
| Research and development | 13,057 | 13,151 | 12,874 | 53,478 | 49,865 |
| Sales and marketing | 9,726 | 9,675 | 12,148 | 42,599 | 44,452 |
| General and administrative | 6,207 | 8,688 | 5,422 | 27,398 | 24,982 |
| Depreciation and amortization | 1,596 | 1,545 | 1,475 | 6,210 | 5,961 |
| Total operating expenses | 30,586 | 33,059 | 31,919 | 129,685 | 125,260 |
| Operating (loss) income | (39,314) | (22,100) | 9,450 | (58,552) | 19,880 |
| Operating margin | (97.8)% | (51.3)% | 11.2% | (26.6)% | 6.7% |
| Interest expense, net | 725 | 620 | 559 | 2,521 | 1,977 |
| Other (income) expense, net | (10) | 63 | 15 | 271 | (114) |
| (Loss) income before income taxes | (40,029) | (22,783) | 8,876 | (61,344) | 18,017 |
| (Benefit) provision for income taxes | (1,021) | 3,417 | (1,135) | 2,230 | (2,183) |
| Net (loss) income | $(39,008) | $(26,200) | $10,011 | $(63,574) | $20,200 |
| (Loss) earnings per share | |||||
| Basic | $(1.41) | $(0.95) | $0.37 | $(2.31) | $0.75 |
| Diluted | $(1.41) | $(0.95) | $0.35 | $(2.31) | $0.72 |
| Weighted-average number of shares outstanding to compute (loss) earnings per share | |||||
| Basic | 27,680,080 | 27,619,281 | 27,109,926 | 27,519,476 | 26,919,550 |
| Diluted | 27,680,080 | 27,619,281 | 28,273,786 | 27,519,476 | 28,025,278 |
| Share-based compensation included in costs and expenses: | |||||
| Cost of revenues | $47 | $45 | $56 | $207 | $219 |
| Research and development | 1,005 | 1,037 | 1,258 | 4,699 | 4,532 |
| Sales and marketing | 547 | 597 | 702 | 2,572 | 2,603 |
| General and administrative | 1,212 | 1,166 | 879 | 4,115 | 3,326 |
| Total share-based compensation expense | $2,811 | $2,845 | $2,895 | $11,593 | $10,680 |
| CAMBIUM NETWORKS CORPORATION | ||
|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except share information) | ||
| (Unaudited) | ||
| December 31, 2023 | December 31, 2022 | |
| ASSETS | ||
| Current assets | ||
| Cash | $18,710 | $48,162 |
| Accounts receivable, net of allowance of $283 and $577 | 64,103 | 89,321 |
| Inventories, net | 66,878 | 57,068 |
| Recoverable income taxes | 222 | 117 |
| Prepaid expenses | 6,589 | 11,857 |
| Other current assets | 6,069 | 6,464 |
| Total current assets | 162,571 | 212,989 |
| Noncurrent assets | ||
| Property and equipment, net | 12,879 | 11,271 |
| Software, net | 11,985 | 8,439 |
| Operating lease assets | 7,894 | 4,011 |
| Intangible assets, net | 7,675 | 9,173 |
| Goodwill | 9,842 | 9,842 |
| Deferred tax assets, net | 15,238 | 12,782 |
| Other noncurrent assets | 1,335 | 955 |
| TOTAL ASSETS | $229,419 | $269,462 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Accounts payable | $19,120 | $31,284 |
| Accrued liabilities | 44,767 | 28,042 |
| Employee compensation | 5,071 | 7,394 |
| Current portion of long-term external debt, net | 3,186 | 3,158 |
| Deferred revenues | 8,765 | 8,913 |
| Other current liabilities | 13,117 | 8,429 |
| Total current liabilities | 94,026 | 87,220 |
| Noncurrent liabilities | ||
| Long-term external debt, net | 21,926 | 24,463 |
| Deferred revenues | 10,473 | 8,617 |
| Noncurrent operating lease liabilities | 6,595 | 2,170 |
| Other noncurrent liabilities | 1,619 | 1,619 |
| Total liabilities | 134,639 | 124,089 |
| Shareholders' equity | ||
| Share capital; $0.0001 par value; 500,000,000 shares authorized at December 31, 2023 and December 31, 2022; 27,834,908 outstanding at December 31, 2023 and 27,313,273 outstanding at December 31, 2022 | 3 | 3 |
| Additional paid in capital | 152,768 | 138,997 |
| Treasury shares, at cost, 260,236 shares at December 31, 2023 and 209,461 shares at December 31, 2022 | (5,624) | (4,922) |
| Accumulated (deficit) earnings | (50,752) | 12,822 |
| Accumulated other comprehensive loss | (1,615) | (1,527) |
| Total shareholders’ equity | 94,780 | 145,373 |
| TOTAL LIABILITIES AND EQUITY | $229,419 | $269,462 |
| CAMBIUM NETWORKS CORPORATION | |||
|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
| (In thousands) | |||
| (Unaudited) | |||
| Three Months Ended | |||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | |
| Cash flows from operating activities: | |||
| Net (loss) income | $(39,008) | $(26,200) | $10,011 |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
| Depreciation and amortization of software and intangible assets | 2,414 | 2,294 | 1,972 |
| Amortization of debt issuance costs | 99 | 81 | 75 |
| Share-based compensation | 2,811 | 2,845 | 2,895 |
| Deferred income taxes | (2,744) | 3,612 | (3,202) |
| Provision for inventory excess and obsolescence | 10,958 | 4,577 | 2,024 |
| Other | (431) | 155 | (31) |
| Change in assets and liabilities: | |||
| Receivables | 9,399 | 22,457 | (3,470) |
| Inventories | 1,928 | (1,993) | (8,451) |
| Prepaid expenses | 2,224 | (772) | (3,768) |
| Accounts payable | (7,141) | (5,156) | 3,114 |
| Accrued employee compensation | (145) | (527) | 1,293 |
| Other assets and liabilities | 13,410 | (1,619) | 1,564 |
| Net cash (used in) provided by operating activities | (6,226) | (246) | 4,026 |
| Cash flows from investing activities: | |||
| Purchase of property and equipment | (1,228) | (1,125) | (1,332) |
| Purchase of software | (1,118) | (2,185) | (1,230) |
| Net cash used in investing activities | (2,346) | (3,310) | (2,562) |
| Cash flows from financing activities: | |||
| Repayment of term loan | (656) | (656) | (657) |
| Payment of debt issuance costs | (122) | — | — |
| Issuance of ordinary shares under ESPP | 578 | — | 839 |
| Taxes paid related to net share settlement of equity awards | (48) | (219) | (226) |
| Proceeds from share option exercises | — | 6 | 1,872 |
| Net cash (used in) provided by financing activities | (248) | (869) | 1,828 |
| Effect of exchange rate on cash | 1 | (24) | 11 |
| Net (decrease) increase in cash | (8,819) | (4,449) | 3,303 |
| Cash, beginning of period | 27,529 | 31,978 | 44,859 |
| Cash, end of period | $18,710 | $27,529 | $48,162 |
| Supplemental disclosure of cash flow information: | |||
| Income taxes paid | $964 | $1,120 | $438 |
| Interest paid | $486 | $474 | $310 |
| CAMBIUM NETWORKS CORPORATION | |||||
|---|---|---|---|---|---|
| SUPPLEMENTAL FINANCIAL INFORMATION | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| REVENUES BY PRODUCT CATEGORY | |||||
| Three Months Ended · Year Ended | |||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |
| Point-to-Multi-Point | $22,575 | $23,596 | $29,656 | $95,197 | $114,941 |
| Point-to-Point | 21,874 | 15,809 | 21,276 | 80,765 | 67,083 |
| Enterprise | (5,478) | 2,499 | 31,992 | 39,097 | 109,844 |
| Other | 1,235 | 1,142 | 1,583 | 5,136 | 5,031 |
| Total Revenues | $40,206 | $43,046 | $84,507 | $220,195 | $296,899 |
| REVENUES BY REGION | |||||
| Three Months Ended · Year Ended | |||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |
| North America | $27,056 | $17,768 | $44,350 | $131,943 | $133,897 |
| Europe, Middle East and Africa | 3,418 | 14,274 | 20,007 | 44,169 | 90,883 |
| Caribbean and Latin America | 5,303 | 5,726 | 9,244 | 20,729 | 31,223 |
| Asia Pacific | 4,429 | 5,278 | 10,906 | 23,354 | 40,896 |
| Total Revenues | $40,206 | $43,046 | $84,507 | $220,195 | $296,899 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.