- Revenues of $40.2 million,
decreased 7% sequentially, and decreased 52% year-over-year
- Gross margin of (21.7)%, non-GAAP(1) gross margin of
(19.4)%
- Operating loss of $39.3 million,
non-GAAP(1) operating loss of $34.1 million
- Net loss of $39.0 million or a
loss of $1.41 per diluted share,
non-GAAP(1) net loss of $26.4
million or a loss of $0.95 per
diluted share
- Adjusted EBITDA(1) loss of $32.9 million or (81.8)% of revenues
ROLLING MEADOWS, Ill.,
Feb. 15, 2024 /PRNewswire/ -- Cambium
Networks Corporation ("Cambium Networks") (NASDAQ: CMBM), a leading
provider of wireless networking infrastructure solutions, today
announced financial results for the fourth quarter and full year
ended December 31, 2023.
|
|
GAAP
|
|
Non-GAAP (1)
|
(in millions, except
percentages)
|
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
|
Q4 2023
|
|
Q3 2023
|
|
Q4 2022
|
Revenues
|
|
$
40.2
|
|
$
43.0
|
|
$
84.5
|
|
$
40.2
|
|
$
43.0
|
|
$
84.5
|
Gross margin
|
|
(21.7) %
|
|
25.5 %
|
|
49.0 %
|
|
(19.4) %
|
|
27.7 %
|
|
49.6 %
|
Operating
margin
|
|
(97.8) %
|
|
(51.3) %
|
|
11.2 %
|
|
(84.9) %
|
|
(36.1) %
|
|
15.6 %
|
Net (loss)
income
|
|
$
(39.0)
|
|
$
(26.2)
|
|
$
10.0
|
|
$
(26.4)
|
|
$
(12.1)
|
|
$
10.3
|
Adjusted EBITDA
margin
|
|
|
|
|
|
|
|
(81.8) %
|
|
(33.5) %
|
|
16.9 %
|
|
|
GAAP
|
|
Non-GAAP (1)
|
(in millions, except
percentages)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
$
220.2
|
|
$
296.9
|
|
$
220.2
|
|
$
296.9
|
Gross margin
|
|
32.3 %
|
|
48.9 %
|
|
33.8 %
|
|
49.5 %
|
Operating
margin
|
|
(26.6) %
|
|
6.7 %
|
|
(17.5) %
|
|
11.6 %
|
Net (loss)
income
|
|
$
(63.6)
|
|
$
20.2
|
|
$
(30.7)
|
|
$
26.9
|
Adjusted EBITDA
margin
|
|
|
|
|
|
(15.5) %
|
|
13.1 %
|
1 Refer to Supplemental Financial Information
accompanying this press release for a reconciliation of GAAP to
non-GAAP numbers and for reconciliation of adjusted EBITDA for the
for the fourth quarter and full year 2023 ended December 31, 2023.
"Our revenue shortfall was due in part to an $11 million reduction to revenues mostly as the
result of incentives and discounts provided to distributors related
to our Enterprise business during the fourth quarter 2023. As
expected, we delivered a solid quarter of government defense
shipments in our Point-to-Point business, received meaningful
orders for our new 6 GHz products in the Point-to-Multi-Point
business ahead of the Federal Communications Commission's (FCC's)
approval, and continued to make significant reductions in channel
inventories for the Enterprise business," said Morgan Kurk, president and CEO.
Kurk continued, "The approval of 6 GHz spectrum by the FCC will
accelerate the growth of the Point-to-Multi-Point business during
2024. We believe we are well positioned to deliver future growth
and are taking the necessary steps to rationalize business
operations and improve operating efficiencies to benefit our
operating results during calendar 2024."
Revenues of $40.2 million for the
fourth quarter 2023 decreased $44.3
million year-over-year primarily as a result of lower
revenues due in part by an $11.0
million reduction to revenues mostly as the result of
incentives provided to distributors offering aggressive Enterprise
product discounts to clear excess channel inventories, high stock
rotations, slowing economies, and lower Point-to-Multi-Point
revenues with the weakness primarily from regions outside of
North America, partially offset by
higher Point-to-Point revenues due to increased defense revenues.
Revenues for the fourth quarter 2023 decreased by $2.8 million compared to $43.0 million for the third quarter 2023,
primarily due to lower Enterprise revenues due to the previously
mentioned Enterprise rebates, stock rotations, as well as economic
headwinds, while Point-to-Multi-Point revenues decreased primarily
due to weakness in EMEA partially offset by strength in
North America from customers
purchasing 6 GHz products under experimental licenses ahead of the
FCC's approval of 6 GHz spectrum, and strength in the
Point-to-Point business due to higher defense revenues.
GAAP gross margin for the fourth quarter 2023 was (21.7)%,
compared to 49.0% for the fourth quarter 2022, and 25.5% for the
third quarter 2023. GAAP operating loss for the fourth quarter 2023
was $39.3 million, compared to
operating income of $9.5 million for
the fourth quarter 2022, and operating loss of $22.1 million for the third quarter 2023. GAAP
net loss for the fourth quarter 2023 was $39.0 million, or net loss of $1.41 per diluted share, compared to net income
of $10.0 million, or net earnings of
$0.35 per diluted share for the
fourth quarter 2022, and net loss of $26.2
million, or net loss of $0.95
per diluted share for the third quarter 2023.
Non-GAAP gross margin for the fourth quarter 2023 was (19.4)%
and included the $11 million
reduction in revenues as the result of price incentives provided to
distributors, and inventory reserves of approximately $18.9 million mostly for Enterprise products, and
compared to 49.6% for the fourth quarter 2022, and 27.7% for third
quarter 2023. Non-GAAP operating loss for the fourth quarter 2023
was $34.1 million, compared to
non-GAAP operating income of $13.2
million for the fourth quarter 2022, and a non-GAAP
operating loss of $15.5 million for
the third quarter 2023. Non-GAAP net loss for the fourth quarter
2023 was $26.4 million, or a net loss
of $0.95 per diluted share, compared
to net income of $10.3 million, or
net earnings of $0.36 per diluted
share for the fourth quarter 2022, and net loss of $12.1 million, or a net loss of $0.44 per diluted share for the third quarter
2023. For the fourth quarter 2023, adjusted EBITDA was a loss of
$32.9 million or (81.8)% of revenues,
compared to adjusted EBITDA of $14.3
million or 16.9% of revenues for the fourth quarter 2022,
and adjusted EBITDA loss of $14.4
million or (33.5)% of revenues for the third quarter
2023.
For full year 2023, revenues of $220.2
million decreased by $76.7
million compared to full year 2022. GAAP gross margin was
32.3% for full year 2023 compared to 48.9% for 2022. Non-GAAP gross
margin was 33.8% of revenues for full year 2023, compared to 49.5%
of revenues for 2022. GAAP operating loss of $58.6 million for full year 2023 compared to GAAP
operating income of $19.9 million for
2022. Non-GAAP operating loss was $38.6
million or (17.5)% of revenues for full year 2023, compared
to non-GAAP operating income of $34.3
million or 11.6% of revenues during 2022. GAAP net loss for
full year 2023 was $63.6 million, or
a net loss of $2.31 per diluted
share, compared to GAAP net income of $20.2
million, or net earnings of $0.72 per diluted share for 2022. For full year
2023, non-GAAP net loss was $30.7
million or a net loss of $1.10
per diluted share, compared to non-GAAP net income $26.9 million or net earnings of $0.94 per diluted share for 2022. Adjusted EBITDA
for full year 2023 was a loss of $34.2
million or (15.5)% of revenues, compared to adjusted EBITDA
of $38.8 million or 13.1% of revenues
for 2022.
Net cash used in operating activities was $6.2 million for the fourth quarter 2023,
compared to net cash provided by operating activities of
$4.0 million for the fourth quarter
2022, and net cash used in operating activities of $0.2 million for the third quarter 2023. Cash
totaled $18.7 million as of
December 31, 2023, $29.5 million lower than December 31, 2022.
Fourth Quarter 2023 Highlights
- Revenues of $40.2 million,
decreased 7% sequentially, and were lower by 52%
year-over-year.
- GAAP net loss of $39.0 million or
a net loss of $1.41 per diluted
share, non-GAAP net loss of $26.4
million or a net loss of $0.95
per diluted share, compared to GAAP net income of $10.0 million, or net earnings of $0.35 per diluted share for the fourth quarter
2022, and non-GAAP net income of $10.3
million or net earnings of $0.36 per diluted share for the fourth quarter
2022.
- Adjusted EBITDA was a loss of $32.9
million or (81.8)% of revenues, compared to adjusted EBITDA
of $14.3 million or 16.9% of revenues
for the fourth quarter 2022.
- Net cash used in operating activities was $6.2 million, compared to net cash provided by
operating activities of $4.0 million
for the fourth quarter 2022.
- Surpassed 20 million radios shipped since becoming a standalone
company.
- Increased net new channel partners by over 1,500
year-over-year, an increase of 12%.
- Devices under cnMaestro™ cloud management increased 14%
year-over-year.
Full Year 2023 Highlights
- Revenues of $220.2 million
decreased 26% compared to 2022.
- Enterprise revenues of $39.1
million decreased 64% compared to 2022.
- Point-to-Multi-Point revenues of $95.2
million decreased 17% compared to 2022.
- Point-to-Point revenues of $80.8
million increased 20% compared to 2022.
- GAAP net loss of $63.6 million or
a net loss of $2.31 per diluted
share, non-GAAP net loss of $30.7
million or a net loss of $1.10
per diluted share.
- Adjusted EBITDA loss of $34.2
million or (15.5)% of revenues, compared to adjusted EBITDA
of $38.8 million or 13.1% of revenues
for 2022.
Cambium Networks' financial outlook does not include the
potential impact of any possible future financial transactions,
acquisitions, pending legal matters, or other transactions.
Accordingly, Cambium Networks only includes such items in the
company's financial outlook to the extent they are reasonably
foreseeable; however, actual results may differ materially from the
outlook.
First Quarter 2024 Financial Outlook
Taking into account our current visibility, the financial
outlook as of February 15, 2024, for
the first quarter ending March 31,
2024, is expected to be as follows:
- Revenues between $43.0-$48.0
million
- GAAP gross margin between 39.3%-42.3%; and non-GAAP gross
margin between 41.0%-44.0%
- GAAP operating expenses between $28.5-$29.5
million; and non-GAAP operating expenses between
$25.4-$26.4
million
- GAAP operating loss between $9.2-$11.6 million;
and non-GAAP operating loss between $5.3-$7.8
million
- Interest expense, net of approximately $0.8 million
- GAAP net loss between $8.6-$11.0 million
or a net loss between $0.31 and
$0.39 per diluted share; and non-GAAP
net loss between $6.1-$8.6 million or a net loss between $0.22 and $0.31 per
diluted share
- Adjusted EBITDA loss between $4.1-$6.6 million;
and adjusted EBITDA margin between (8.6)%-(15.4)%
- GAAP effective tax rate of approximately 12.0%-15.0%; and
non-GAAP effective tax rate which is not meaningful
- Approximately 28.0 million weighted average diluted shares
outstanding
Cash requirements are expected to be as follows:
- Paydown of debt: $0.7
million
- Cash interest expense: approximately $0.6 million
- Capital expenditures: $2.0-$3.0
million
Full Year 2024 Financial Outlook
- Revenues between $215.0-$245.0
million, a decrease of between 2% to an increase of
approximately 11%
- GAAP gross margin approximately 43.0%; and non-GAAP gross
margin approximately 44.0%
- GAAP net loss between $13.3-$27.3 million
or a net loss between $0.47 and
$0.98 per diluted share; and non-GAAP
net (loss) income between $(13.6)-$2.3
million or between a net loss of $0.48 and net earnings of $0.08 per diluted share
- Adjusted EBITDA margin between (2.7)%-4.1%
Conference Call and Webcast
Cambium Networks
will host a live webcast and conference call to discuss its
financial results at 4:30 p.m. ET
today, February 15, 2024. To join the
financial results live webcast and view additional materials which
will be posted to the investor website, listeners should access the
investor page of Cambium Networks website
https://investors.cambiumnetworks.com/. Following the live
webcast, a replay will be available in the event archives at the
same web address for a period of one year.
To access the live conference call by phone, listeners
should register in advance at
https://register.vevent.com/register/BI0916ee75cac74a599dd6f1ea618e78a4. Upon
registration, telephone participants will receive a confirmation
email detailing how to join the conference call, including the
dial-in number and a unique passcode.
In addition, Cambium Networks president & CEO, Morgan Kurk will present and hold one-on-one
meetings with investors on Tuesday, March 5,
2024, at the JMP Securities Technology Conference in
San Francisco; and on Tuesday, March 19, 2024, in person at the ROTH
Capital Partner Annual Conference in Dana
Point, California. To join the live webcasts for the JMP
Securities and ROTH Capital conferences, listeners should access
the investor page of Cambium Networks
website https://investors.cambiumnetworks.com/.
Following the live webcasts, a replay will be available in the
event archives at the same web address.
About Cambium Networks
Cambium Networks enables
service providers, enterprises, industrial organizations, and
governments to deliver exceptional digital experiences and device
connectivity with compelling economics. Our ONE Network platform
simplifies management of Cambium Networks' wired and wireless
broadband and network edge technologies. Our customers can focus
more resources on managing their business rather than the network.
We deliver connectivity that just works.
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
|
Use of non-GAAP (Adjusted) Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States (GAAP), we provide
additional financial metrics that are not prepared in accordance
with GAAP (non-GAAP), including Adjusted EBITDA, non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP operating income and
non-GAAP operating margin, non-GAAP pre-tax income, non-GAAP
provision for income taxes, non-GAAP net income, and non-GAAP fully
weighted basic and diluted shares. Management uses these non-GAAP
financial measures, in addition to GAAP financial measures, to
understand and compare operating results across accounting periods,
for financial and operational decision making, for planning and
forecasting purposes, to measure executive compensation and to
evaluate our financial performance. We believe that these non-GAAP
financial measures help us to identify underlying trends in our
business that could otherwise be masked by the effect of the
expenses that we exclude in the calculations of the non-GAAP
financial measures.
We believe that these financial measures reflect our ongoing
business in a manner that allows for meaningful comparisons and
analysis of trends in the business and provides information to
investors and others in understanding and evaluating our operating
results, enhancing the overall understanding of our past
performance and future prospects. Although the calculation of
non-GAAP financial measures may vary from company to company, our
detailed presentation may facilitate analysis and comparison of our
operating results by management and investors with other peer
companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results in their public disclosures. These
non-GAAP financial measures are discussed below.
Adjusted EBITDA is defined as net (loss) income as reported in
our consolidated statements of operations excluding the impact of
(i) interest expense (income), net; (ii) income tax provision
(benefit); (iii) depreciation and amortization expense; (iv)
nonrecurring expenses, (v) share-based compensation expense, and
(vi) restructuring expenses. EBITDA is widely used by securities
analysts, investors and other interested parties to evaluate the
profitability of companies. EBITDA eliminates potential differences
in performance caused by variations in capital structures
(affecting net finance costs), tax positions (such as the
availability of net operating losses against which to relieve
taxable profits), the cost and age of tangible assets (affecting
relative depreciation expense) and the extent to which intangible
assets are identifiable (affecting relative amortization expense).
We adjust EBITDA to also exclude nonrecurring expenses since this
is one-time in nature and does not reflect our ongoing operations.
We adjust EBITDA for share-based compensation expense which is a
non-cash expense that varies in amount from period to period and is
dependent on market forces that are often beyond Cambium Networks'
control. As a result, management excludes this item from Cambium
Networks' internal operating forecasts and models. We also adjust
EBITDA to exclude nonrecurring expenses and restructuring expenses
as these relate to events outside of the ordinary course of
continuing operations and to provide a more accurate comparison of
our ongoing business results.
Non-GAAP gross margin, non-GAAP operating expenses, non-GAAP
operating income and non-GAAP operating margin, non-GAAP effective
tax rate and non-GAAP net income are used as a supplement to our
unaudited condensed consolidated financial statements presented in
accordance with GAAP. We believe these non-GAAP measures are the
most meaningful for period-to-period comparisons because they
exclude the impact of share-based compensation expense,
restructuring expenses, nonrecurring legal expenses, amortization
of acquired intangibles, and amortization of capitalized software
costs as we do not consider these costs and expenses to be
indicative of our ongoing operations.
Share-based compensation expenses are excluded. Management may
issue different types of awards, including share options, and
restricted share units, and excludes the associated expense in this
non-GAAP measure. Share-based compensation expense is a non-cash
expense that varies in amount from period to period and is
dependent on market forces that are often beyond Cambium Networks
control.
Amortization of acquired intangibles includes customer
relationships and is excluded since these are not indicative of
continuing operations.
Amortization of capitalized software costs include capitalized
research and development activities amortized over their useful
life and included in cost of revenues and are excluded since these
are not indicative of continuing operations.
Restructuring expenses consist primarily of severance costs for
employees which are not related to future operating expenses.
Cambium Networks excludes these expenses since they result from an
event that is outside the ordinary course of continuing operations.
Excluding these charges permits more accurate comparisons of
Cambium Networks' ongoing business results.
Our non-GAAP tax adjustments include the tax impacts from
share-based compensation expense including excess or decremental
tax benefits available to the company that are recorded when
incurred. Non-GAAP results exclude the effect of a valuation
allowance recorded against tax assets for the cumulative loss
related to our UK operation. Cambium Networks excludes these
amounts to more closely approximate the company's ongoing effective
tax rate after adjusting for one-time or unique non-recurring
items. The associated non-GAAP effective tax rate is also applied
to the gross amount of non-GAAP adjustments for the purpose of
calculating non-GAAP net income in total and on a per-share basis.
This approach is designed to enhance the ability of investors to
understand the company's tax expense on its current operations,
provide improved modeling accuracy, and substantially reduce
fluctuations caused by GAAP adjustments which may not reflect
actual cash tax expense.
Non-GAAP fully weighted basic and diluted shares are shown as
outstanding during the entire period presented and include dilutive
shares if their effect on earnings per share is dilutive. We also
use non-GAAP fully weighted basic and diluted shares to provide
more comparable per-share results across periods.
These non-GAAP financial measures do not replace the
presentation of our GAAP financial results and should only be used
as a supplement to, not as a substitute for, our financial results
presented in accordance with GAAP. There are limitations in the use
of non-GAAP measures because they do not include all the expenses
that must be included under GAAP and because they involve the
exercise of judgment concerning exclusions of items from the
comparable non-GAAP financial measure. In addition, other companies
may use other measures to evaluate their performance, or may
calculate non-GAAP measures differently, all of which could reduce
the usefulness of our non-GAAP financial measures as tools for
comparison. We present a "Reconciliation of GAAP Financial Measures
to Non-GAAP Financial Measures" in the tables below.
The following table reconciles net income to Adjusted EBITDA,
the most directly comparable financial measure, calculated and
presented in accordance with GAAP (in thousands):
CAMBIUM NETWORKS CORPORATION
|
SUPPLEMENTAL SCHEDULE OF NON-GAAP ADJUSTED
EBITDA
|
(In thousands)
|
(Unaudited)
|
|
|
Three months ended
|
|
Year ended
|
|
|
December 31, 2023
|
|
September 30, 2023
|
|
December 31, 2022
|
|
December 31, 2023
|
|
December 31, 2022
|
Net (loss)
income
|
|
$
(39,008)
|
|
$
(26,200)
|
|
$
10,011
|
|
$
(63,574)
|
|
$
20,200
|
Interest expense,
net
|
|
725
|
|
620
|
|
559
|
|
2,521
|
|
1,977
|
(Benefit) provision
for income taxes
|
|
(1,021)
|
|
3,417
|
|
(1,135)
|
|
2,230
|
|
(2,183)
|
Depreciation and
amortization of software and intangible assets
|
|
2,414
|
|
2,294
|
|
1,972
|
|
9,025
|
|
7,596
|
EBITDA
|
|
(36,890)
|
|
(19,869)
|
|
11,407
|
|
(49,798)
|
|
27,590
|
Share-based
compensation
|
|
2,811
|
|
2,845
|
|
2,895
|
|
11,593
|
|
10,680
|
Restructuring and
other nonrecurring expenses
|
|
1,191
|
|
2,602
|
|
—
|
|
4,049
|
|
511
|
Adjusted
EBITDA
|
|
$
(32,888)
|
|
$
(14,422)
|
|
$
14,302
|
|
$
(34,156)
|
|
$
38,781
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
(81.8) %
|
|
(33.5) %
|
|
16.9 %
|
|
(15.5) %
|
|
13.1 %
|
The following table reconciles all other GAAP to non-GAAP
financial measures (in thousands):
CAMBIUM NETWORKS CORPORATION
|
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP
FINANCIAL MEASURES
|
(In thousands, except per share
data)
|
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31, 2023
|
|
September 30, 2023
|
|
December 31, 2022
|
|
December 31, 2023
|
|
December 31, 2022
|
GAAP gross profit
|
|
$
(8,728)
|
|
$
10,959
|
|
$
41,369
|
|
$
71,133
|
|
$
145,140
|
Share-based
compensation expense
|
|
47
|
|
45
|
|
56
|
|
207
|
|
219
|
Amortization of
capitalized software costs
|
|
818
|
|
750
|
|
497
|
|
2,815
|
|
1,635
|
Restructuring and
nonrecurring expense
|
|
69
|
|
152
|
|
—
|
|
221
|
|
—
|
Non-GAAP gross profit
|
|
$
(7,794)
|
|
$
11,906
|
|
$
41,922
|
|
$
74,376
|
|
$
146,994
|
Non-GAAP gross margin
|
|
-19.4 %
|
|
27.7 %
|
|
49.6 %
|
|
33.8 %
|
|
49.5 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
expense
|
|
$
13,057
|
|
$
13,151
|
|
$
12,874
|
|
$
53,478
|
|
$
49,865
|
Share-based
compensation expense
|
|
1,005
|
|
1,037
|
|
1,258
|
|
4,699
|
|
4,532
|
Restructuring and other
nonrecurring expense
|
|
1,145
|
|
630
|
|
—
|
|
2,031
|
|
—
|
Non-GAAP research and development
expense
|
|
$
10,907
|
|
$
11,484
|
|
$
11,616
|
|
$
46,748
|
|
$
45,333
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
expense
|
|
$
9,726
|
|
$
9,675
|
|
$
12,148
|
|
$
42,599
|
|
$
44,452
|
Share-based
compensation expense
|
|
547
|
|
597
|
|
702
|
|
2,572
|
|
2,603
|
Restructuring and other
nonrecurring expenses
|
|
34
|
|
350
|
|
—
|
|
384
|
|
166
|
Non-GAAP sales and marketing
expense
|
|
$
9,145
|
|
$
8,728
|
|
$
11,446
|
|
$
39,643
|
|
$
41,683
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
expense
|
|
$
6,207
|
|
$
8,688
|
|
$
5,422
|
|
$
27,398
|
|
$
24,982
|
Share-based
compensation expense
|
|
1,212
|
|
1,166
|
|
879
|
|
4,115
|
|
3,326
|
Restructuring and other
nonrecurring expenses
|
|
(57)
|
|
1,470
|
|
—
|
|
1,413
|
|
345
|
Non-GAAP general and administrative
expense
|
|
$
5,052
|
|
$
6,052
|
|
$
4,543
|
|
$
21,870
|
|
$
21,311
|
|
|
|
|
|
|
|
|
|
|
|
GAAP depreciation and
amortization
|
|
$
1,596
|
|
$
1,545
|
|
$
1,475
|
|
$
6,210
|
|
$
5,961
|
Amortization of
acquired intangibles
|
|
375
|
|
374
|
|
374
|
|
1,498
|
|
1,603
|
Non-GAAP depreciation and
amortization
|
|
$
1,221
|
|
$
1,171
|
|
$
1,101
|
|
$
4,712
|
|
$
4,358
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating (loss) income
|
|
$
(39,314)
|
|
$
(22,100)
|
|
$
9,450
|
|
$
(58,552)
|
|
$
19,880
|
Share-based
compensation expense
|
|
2,811
|
|
2,845
|
|
2,895
|
|
11,593
|
|
10,680
|
Amortization of
capitalized software costs
|
|
818
|
|
750
|
|
497
|
|
2,815
|
|
1,635
|
Amortization of
acquired intangibles
|
|
375
|
|
374
|
|
374
|
|
1,498
|
|
1,603
|
Restructuring and other
nonrecurring expenses
|
|
1,191
|
|
2,602
|
|
—
|
|
4,049
|
|
511
|
Non-GAAP operating (loss)
income
|
|
$
(34,119)
|
|
$
(15,529)
|
|
$
13,216
|
|
$
(38,597)
|
|
$
34,309
|
|
|
|
|
|
|
|
|
|
|
|
GAAP pre-tax (loss) income
|
|
$
(40,029)
|
|
$
(22,783)
|
|
$
8,876
|
|
$
(61,344)
|
|
$
18,017
|
Share-based
compensation expense
|
|
2,811
|
|
2,845
|
|
2,895
|
|
11,593
|
|
10,680
|
Amortization of
capitalized software costs
|
|
818
|
|
750
|
|
497
|
|
2,815
|
|
1,635
|
Amortization of
acquired intangibles
|
|
375
|
|
374
|
|
374
|
|
1,498
|
|
1,603
|
Restructuring and other
nonrecurring expenses
|
|
1,191
|
|
2,602
|
|
—
|
|
4,049
|
|
511
|
Non-GAAP pre-tax (loss) income
|
|
$
(34,834)
|
|
$
(16,212)
|
|
$
12,642
|
|
$
(41,389)
|
|
$
32,446
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision (benefit) for income
taxes
|
|
$
(1,021)
|
|
$
3,417
|
|
$
(1,135)
|
|
$
2,230
|
|
$
(2,183)
|
Valuation allowance
impacts
|
|
17,721
|
|
5,292
|
|
—
|
|
23,013
|
|
—
|
Tax rate
change
|
|
(2,753)
|
|
119
|
|
118
|
|
(2,753)
|
|
(873)
|
Tax impacts of share
vesting
|
|
169
|
|
80
|
|
(221)
|
|
168
|
|
(221)
|
Tax effect of Non-GAAP
adjustments
|
|
(1,039)
|
|
(1,314)
|
|
(753)
|
|
(3,991)
|
|
(2,886)
|
All other discrete
items
|
|
(6,662)
|
|
3,373
|
|
(2,598)
|
|
(3,561)
|
|
(3,714)
|
Non-GAAP (benefit) provision for income
taxes
|
|
$
(8,457)
|
|
$
(4,133)
|
|
$
2,319
|
|
$
(10,645)
|
|
$
5,511
|
Non-GAAP ETR
|
|
24.3 %
|
|
25.5 %
|
|
18.3 %
|
|
25.7 %
|
|
17.0 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net (loss) income
|
|
$
(39,008)
|
|
$
(26,200)
|
|
$
10,011
|
|
$
(63,574)
|
|
$
20,200
|
Share-based
compensation expense
|
|
2,811
|
|
2,845
|
|
2,895
|
|
11,593
|
|
10,680
|
Amortization of
capitalized software costs
|
|
818
|
|
750
|
|
497
|
|
2,815
|
|
1,635
|
Amortization of
acquired intangibles
|
|
375
|
|
374
|
|
374
|
|
1,498
|
|
1,603
|
Restructuring and other
nonrecurring expenses
|
|
1,191
|
|
2,602
|
|
—
|
|
4,049
|
|
511
|
Non-GAAP adjustments to
tax
|
|
8,475
|
|
8,864
|
|
(2,701)
|
|
16,866
|
|
(4,808)
|
Tax effect of Non-GAAP
adjustments
|
|
(1,039)
|
|
(1,314)
|
|
(753)
|
|
(3,991)
|
|
(2,886)
|
Non-GAAP net (loss) income
|
|
$
(26,377)
|
|
$
(12,079)
|
|
$
10,323
|
|
$
(30,744)
|
|
$
26,935
|
Non-GAAP fully weighted basic
shares
|
|
27,844
|
|
27,662
|
|
27,313
|
|
27,835
|
|
27,313
|
Non-GAAP fully weighted diluted
shares
|
|
27,861
|
|
27,744
|
|
28,605
|
|
27,871
|
|
28,578
|
Non-GAAP net income per Non-GAAP basic
share
|
|
$
(0.95)
|
|
$
(0.44)
|
|
$
0.38
|
|
$
(1.10)
|
|
$
0.99
|
Non-GAAP net income per Non-GAAP diluted
share
|
|
$
(0.95)
|
|
$
(0.44)
|
|
$
0.36
|
|
$
(1.10)
|
|
$
0.94
|
Investor Inquiries:
Peter
Schuman, IRC
Vice President Investor & Industry Analyst Relations
Cambium Networks
+1 (847) 264-2188
peter.schuman@cambiumnetworks.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/cambium-networks-reports-fourth-quarter-and-full-year-2023-financial-results-302062590.html
SOURCE Cambium Networks