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Cambium Networks Corp

For the period ended Aug 8, 2024. Filed Aug 8, 2024.

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A notice of a major event between regular reports, such as results, a deal or a change of executives. It is often the first formal record of the news.

Aug 8, 2024 · Filed Aug 8, 2024

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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.

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 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2024, and Form 10-Q filed on May 10, 2024. 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 ability to meet the financial and other covenants under our secured credit facilities; our ability to predict and respond to emerging technological trends and network operators' changing needs; our ability to successfully comply with or obtain a waiver of compliance with the financial covenants under our credit facilities and therefore continue as a going concern; the sufficiency of our cash resources and needs for additional financing; our ability to forecast future demand or the level of inventory in our; our ability to manage inventory and the risk of excess or obsolete inventory in our channel; the impact of competitive pressures on the development of new products and our success against competitors in our markets; risks caused by political tensions around the world; the strength of the United States 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 recessions; our reliance on limited or sole source suppliers; 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 ability of our third-party logistics and warehousing providers to deliver products to our channel partners and network operators in a timely manner; 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-attacks; the impact of any material weaknesses in and our ability to maintain an effective system of internal controls, produce timely and accurate financial statements or comply with applicable regulations; the impact of actual or threatened health epidemics and other outbreaks; our reliance on the availability of third-party licenses; and our inability to obtain intellectual property protections for our products. 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
June 30, 2024March 31, 2024June 30, 2023
Revenues$45,946$42,337$59,542
Cost of revenues31,53633,65230,300
Gross profit14,4108,68529,242
Gross margin31.4%20.5%49.1%
Operating expenses
Research and development9,14910,79913,008
Sales and marketing9,7069,72111,528
General and administrative5,9887,5105,836
Depreciation and amortization1,6691,6331,573
Total operating expenses26,51229,66331,945
Operating loss(12,102)(20,978)(2,703)
Operating margin(26.3)%(49.6)%(4.5)%
Interest expense, net1,304881579
Other expense, net35964
Loss before income taxes(13,409)(21,918)(3,346)
Provision (benefit) for income taxes(4,266)4,529(704)
Net loss$(9,143)$(26,447)$(2,642)
Loss per share
Basic$(0.33)$(0.95)$(0.10)
Diluted$(0.33)$(0.95)$(0.10)
Weighted-average number of shares outstanding to compute loss per share
Basic27,902,95627,849,60427,432,705
Diluted27,902,95627,849,60427,432,705
Share-based compensation included in costs and expenses:
Cost of revenues$51$33$59
Research and development9209451,388
Sales and marketing486508728
General and administrative1,1041,100887
Total share-based compensation expense$2,561$2,586$3,062
CAMBIUM NETWORKS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
June 30, 2024December 31, 2023
ASSETS
Current assets
Cash$42,574$18,710
Accounts receivable, net of credit losses of $564 and $28356,68064,103
Inventories, net49,96966,878
Income taxes receivable4,651222
Prepaid expenses12,0576,589
Other current assets6,2366,069
Total current assets172,167162,571
Noncurrent assets
Property and equipment, net14,97812,879
Software, net12,98911,985
Operating lease assets6,9317,894
Intangible assets, net6,9267,675
Goodwill9,8429,842
Deferred tax assets, net—3,694
Other noncurrent assets1,2581,335
TOTAL ASSETS$225,091$217,875
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$16,986$19,120
Accrued liabilities46,45547,069
Employee compensation4,3035,071
Current portion of long-term debt, net3,1733,186
Deferred revenues8,2618,765
Other current liabilities10,11413,117
Total current liabilities89,29296,328
Noncurrent liabilities
Long-term debt, net65,68521,926
Deferred revenues10,33810,473
Noncurrent operating lease liabilities7,0466,595
Other noncurrent liabilities1,7661,619
Total liabilities174,127136,941
Shareholders' equity
Share capital; $0.0001 par value; 500,000,000 shares authorized at June 30, 2024 and December 31, 2023; 28,208,596 outstanding at June 30, 2024 and 27,834,908 outstanding at December 31, 202333
Additional paid in capital158,578152,768
Treasury shares, at cost, 269,613 shares at June 30, 2024 and 260,236 shares at December 31, 2023(5,660)(5,624)
Accumulated deficit(100,188)(64,598)
Accumulated other comprehensive loss(1,769)(1,615)
Total shareholders’ equity50,96480,934
TOTAL LIABILITIES AND EQUITY$225,091$217,875
CAMBIUM NETWORKS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
Cash flows from operating activities:
Net loss$(9,143)$(26,447)$(2,642)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization of software and intangible assets2,5842,5362,222
Amortization of debt issuance costs787779
Share-based compensation2,5612,5863,062
Deferred income taxes—3,694(1,805)
Provision for inventory excess and obsolescence2,3846,175(276)
Other(243)68769
Change in assets and liabilities:
Receivables1,6742,3859,165
Inventories3,2405,110(13,739)
Prepaid expenses684(6,161)2,734
Income taxes receivable(4,353)(78)27
Accounts payable(298)(2,434)134
Accrued employee compensation387(1,018)(931)
Other assets and liabilities2,846(2,759)(2,620)
Net cash provided by (used in) operating activities2,401(15,647)(4,521)
Cash flows from investing activities:
Purchases of property and equipment(2,314)(1,767)(667)
Purchases of software(1,856)(1,250)(1,796)
Net cash used in investing activities(4,170)(3,017)(2,463)
Cash flows from financing activities:
Proceeds from issuance of revolver debt5,00040,000—
Repayment of term loan—(1,313)(657)
Issuance of ordinary shares under ESPP663—1,102
Taxes paid related to net share settlement of equity awards(17)(15)(285)
Proceeds from share option exercises——105
Net cash provided by financing activities5,64638,672265
Effect of exchange rate on cash(14)(7)1
Net increase (decrease) in cash3,86320,001(6,718)
Cash, beginning of period38,71118,71038,696
Cash, end of period$42,574$38,711$31,978
Supplemental disclosure of cash flow information:
Income taxes paid$2,231$116$2,639
Interest paid$922$1,030$468
Significant non-cash activities:
Increase in property, equipment and software unpaid in accounts payable or accrued in liabilties$46$244$389
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$—$—$674
Deferred issuance costs incurred but not yet paid$275$—$—
CAMBIUM NETWORKS CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands)
(Unaudited)
REVENUES BY PRODUCT CATEGORY
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
Point-to-Multi-Point$19,647$19,421$26,734
Point-to-Point13,65614,41125,074
Enterprise11,3107,1636,420
Other1,3331,3421,314
Total Revenues$45,946$42,337$59,542
REVENUES BY REGION
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
North America$20,647$25,049$39,526
Europe, Middle East and Africa15,0038,4106,769
Caribbean and Latin America5,3064,8926,015
Asia Pacific4,9903,9867,232
Total Revenues$45,946$42,337$59,542
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