- Revenues of $42.3 million,
increased 5% sequentially, and decreased 45% year-over-year
- Gross margin of 20.5%, non-GAAP(1) gross margin of
22.7%
- Operating loss of $21.0 million,
non-GAAP(1) operating loss of $16.7 million
- Net loss of $26.4 million or a
loss of $0.95 per diluted share,
non-GAAP(1) net loss of $12.7
million or a loss of $0.46 per
diluted share
- Adjusted EBITDA(1) loss of $15.5 million or (36.7)% of revenues
HOFFMAN
ESTATES, Ill., May 9, 2024
/PRNewswire/ -- Cambium Networks Corporation ("Cambium Networks")
(NASDAQ: CMBM), a leading provider of wireless networking
infrastructure solutions, today announced financial results for the
first quarter 2024 ended March 31,
2024.
|
|
GAAP
|
|
Non-GAAP (1)
|
(in millions, except
percentages)
|
|
Q1 2024
|
|
Q4 2023
|
|
Q1 2023
|
|
|
|
Q1 2024
|
|
Q4 2023
|
|
Q1 2023
|
Revenues
|
|
$
42.3
|
|
$
40.2
|
|
$
77.4
|
|
|
|
$
42.3
|
|
$
40.2
|
|
$
77.4
|
Gross margin
|
|
20.5 %
|
|
(27.4) %
|
|
51.2 %
|
|
|
|
22.7 %
|
|
(25.1) %
|
|
52.1 %
|
Operating
margin
|
|
(49.6) %
|
|
(103.5) %
|
|
7.2 %
|
|
|
|
(39.5) %
|
|
(90.6) %
|
|
12.2 %
|
Net (loss)
income
|
|
$
(26.4)
|
|
$
(52.9)
|
|
$
4.3
|
|
|
|
$
(12.7)
|
|
$
(28.2)
|
|
$
6.8
|
Adjusted EBITDA
margin
|
|
|
|
|
|
|
|
|
|
(36.7) %
|
|
(87.5) %
|
|
13.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 first quarter
2024 ended March 31, 2024.
|
"I'm pleased we delivered sequential growth during the first
quarter as the Enterprise business has started to recover and we
reduced channel inventories. We are at the start of a new product
cycle for our Point-to-Multi-Point business with the Federal
Communications Commission's (FCC's) approval of 6 GHz spectrum,"
said Morgan Kurk, president and
CEO.
Kurk continued, "While we have a lot of hard work ahead of us,
Cambium is well positioned to deliver sequential growth for the
remainder of calendar 2024, and we continue to work to improve our
operating efficiency to drive increased cash generation."
Revenues of $42.3 million for the
first quarter 2024 decreased $35.1
million year-over-year primarily as a result of lower
revenues across all product families. Revenues for the first
quarter 2024 increased by $2.1
million compared to $40.2
million for the fourth quarter 2023, primarily due to higher
Enterprise revenues in North
America and Europe,
Middle-East, and Africa as channel inventories begin to
improve, partially offset by lower Point-to-Point revenues due to
delays in government funding for defense orders in North America and Europe, and lower Point-to-Multi-Point
revenues due to delays in the timing of approval for 6 GHz products
in the United States and its
territories.
GAAP gross margin for the first quarter 2024 was 20.5%, compared
to 51.2% for the first quarter 2023, and (27.4%) for the fourth
quarter 2023. GAAP operating loss for the first quarter 2024 was
$21.0 million, compared to operating
income of $5.6 million for the first
quarter 2023, and operating loss of $41.6
million for the fourth quarter 2023. GAAP net loss for the
first quarter 2024 was $26.4 million,
or net loss of $0.95 per diluted
share, compared to net income of $4.3
million, or net earnings of $0.15 per diluted share for the first quarter
2023, and a net loss of $52.9
million, or net loss of $1.91
per diluted share for the fourth quarter 2023.
Non-GAAP gross margin for the first quarter 2024 was 22.7%,
which included $7.0 million in
inventory reserves and additional supplier commitments, and
compared to 52.1% for the first quarter 2023, and (25.1)% for the
fourth quarter 2023 which included an $11
million reduction in revenues as the result of price
incentives provided to distributors, and inventory reserves of
approximately $21.2 million mostly
for Enterprise products. Non-GAAP operating loss for the first
quarter 2024 was $16.7 million,
compared to non-GAAP operating income of $9.4 million for the first quarter 2023, and a
non-GAAP operating loss of $36.4
million for the fourth quarter 2023. Non-GAAP net loss for
the first quarter 2024 was $12.7
million, or a net loss of $0.46 per diluted share, compared to net income
of $6.8 million, or net earnings of
$0.24 per diluted share for the first
quarter 2024, and net loss of $28.2
million, or a net loss of $1.01 per diluted share for the fourth quarter
2023. For the first quarter 2024, adjusted EBITDA was a loss of
$15.5 million or (36.7)% of revenues,
compared to adjusted EBITDA of $10.4
million or 13.4% of revenues for the first quarter 2023, and
an adjusted EBITDA loss of $35.2
million or (87.5)% of revenues for the fourth quarter
2023.
Net cash used in operating activities was $15.6 million for the first quarter 2024,
compared to net cash used in operating activities of $6.0 million for the first quarter 2023, and net
cash used in operating activities of $6.2
million for the fourth quarter 2023. Cash totaled
$38.7 million as of March 31, 2024, $20.0
million higher than December 31,
2023.
First Quarter 2024 Highlights
- Revenues of $42.3 million,
increased 5% sequentially, and was lower by 45%
year-over-year.
- GAAP net loss of $26.4 million or
a net loss of $0.95 per diluted
share, non-GAAP net loss of $12.7
million or a net loss of $0.46
per diluted share, compared to GAAP net income of $4.3 million, or net earnings of $0.15 per diluted share for the first quarter
2023, and non-GAAP net income of $6.8
million or net earnings of $0.24 per diluted share for the first quarter
2023.
- Adjusted EBITDA was a loss of $15.5
million or (36.7)% of revenues, compared to adjusted EBITDA
of $10.4 million or 13.4% of revenues
for the first quarter 2023.
- Net cash used in operating activities was $15.6 million, compared to net cash used in
operating activities of $6.0 million
for the first quarter 2023.
- Surpassed 23 million radios shipped since becoming a standalone
company.
- Devices under cnMaestro™ cloud management increased 15%
year-over-year.
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.
Second Quarter 2024 Financial Outlook
Taking into
account our current visibility, the financial outlook as of
May 9, 2024, for the second quarter
ending June 30, 2024, is as
follows:
- Revenues between $43.0-$48.0
million
- GAAP gross margin between 37.9%-39.9%; and non-GAAP gross
margin between 40.0%-42.0%
- GAAP operating expenses between $27.7-$28.7
million; and non-GAAP operating expenses between
$24.6-$25.6
million
- GAAP operating loss between $9.6-$11.4 million;
and non-GAAP operating loss between $5.4-$7.4
million
- Interest expense, net, of approximately $1.8 million
- GAAP net loss between $11.3-$13.2 million
or a net loss between $0.40 and
$0.47 per diluted share; and non-GAAP
net loss between $5.4-$6.9 million or a net loss between $0.19 and $0.24 per
diluted share
- Adjusted EBITDA loss between $4.2-$6.2 million;
and adjusted EBITDA margin between (8.8)%-(14.4)%
- GAAP effective tax rate not meaningful; and a non-GAAP
effective tax benefit of approximately 25%
- 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 $1.7 million
- Capital expenditures: $1.5-$2.5
million
Full Year 2024 Financial Outlook
- Revenues between $205.0-$225.0
million, a decrease of approximately 7% to up 2%
- GAAP gross margin approximately 38.0%; and non-GAAP gross
margin approximately 40.0%
- GAAP net loss between $34.2-$42.8 million
or a net loss between $1.22 and
$1.53 per diluted share; and non-GAAP
net loss between $11.6-$18.0 million or between a net loss between
$0.41 and $0.64 per diluted share
- Adjusted EBITDA margin between (2.2)%-(6.8)%
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, May 9, 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/BIa49474c45d8f4fc9b8063983dae84925. 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 virtually on Thursday, May 16, 2024, at the Needham
Technology, Media, & Consumer Conference, and on Tuesday, June 25, 2024, at the Northland Growth
Conference.
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 make 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.
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. 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
|
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
42,337
|
|
$
40,206
|
|
$
77,401
|
|
Cost of
revenues
|
|
33,652
|
|
51,236
|
|
37,741
|
|
Gross profit
|
|
8,685
|
|
(11,030)
|
|
39,660
|
|
Gross margin
|
|
20.5 %
|
|
(27.4) %
|
|
51.2 %
|
|
Operating expenses
|
|
|
|
|
|
|
|
Research and
development
|
|
10,799
|
|
13,057
|
|
14,262
|
|
Sales and
marketing
|
|
9,721
|
|
9,726
|
|
11,670
|
|
General and
administrative
|
|
7,510
|
|
6,207
|
|
6,667
|
|
Depreciation and
amortization
|
|
1,633
|
|
1,596
|
|
1,496
|
|
Total operating expenses
|
|
29,663
|
|
30,586
|
|
34,095
|
|
Operating (loss) income
|
|
(20,978)
|
|
(41,616)
|
|
5,565
|
|
Operating margin
|
|
(49.6) %
|
|
(103.5) %
|
|
7.2 %
|
|
Interest expense,
net
|
|
881
|
|
725
|
|
597
|
|
Other expense (income),
net
|
|
59
|
|
(10)
|
|
154
|
|
(Loss) income before income
taxes
|
|
(21,918)
|
|
(42,331)
|
|
4,814
|
|
Provision for income
taxes
|
|
4,529
|
|
10,523
|
|
538
|
|
Net (loss) income
|
|
$
(26,447)
|
|
$
(52,854)
|
|
$
4,276
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.95)
|
|
$
(1.91)
|
|
$
0.16
|
|
Diluted
|
|
$
(0.95)
|
|
$
(1.91)
|
|
$
0.15
|
|
Weighted-average number of shares outstanding to
compute (loss) earnings per share
|
|
|
|
|
|
|
|
Basic
|
|
27,849,604
|
|
27,680,080
|
|
27,341,013
|
|
Diluted
|
|
27,849,604
|
|
27,680,080
|
|
28,452,855
|
|
|
|
|
|
|
|
|
|
Share-based compensation included in costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
$
33
|
|
$
47
|
|
$
56
|
|
Research and
development
|
|
945
|
|
1,005
|
|
1,269
|
|
Sales and
marketing
|
|
508
|
|
547
|
|
700
|
|
General and
administrative
|
|
1,100
|
|
1,212
|
|
850
|
|
Total share-based
compensation expense
|
|
$
2,586
|
|
$
2,811
|
|
$
2,875
|
|
|
|
|
|
|
|
|
|
CAMBIUM NETWORKS CORPORATION
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(In thousands, except share
information)
|
(Unaudited)
|
|
|
March 31, 2024
|
|
December 31, 2023
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash
|
|
$
38,711
|
|
$
18,710
|
Accounts receivable,
net of credit losses of $860 and $283
|
|
58,157
|
|
64,103
|
Inventories,
net
|
|
55,593
|
|
66,878
|
Income taxes
receivable
|
|
300
|
|
222
|
Prepaid
expenses
|
|
12,752
|
|
6,589
|
Other current
assets
|
|
6,334
|
|
6,069
|
Total current assets
|
|
171,847
|
|
162,571
|
|
|
|
|
|
Noncurrent assets
|
|
|
|
|
Property and
equipment, net
|
|
13,741
|
|
12,879
|
Software,
net
|
|
12,220
|
|
11,985
|
Operating lease
assets
|
|
7,327
|
|
7,894
|
Intangible assets,
net
|
|
7,300
|
|
7,675
|
Goodwill
|
|
9,842
|
|
9,842
|
Deferred tax assets,
net
|
|
—
|
|
3,694
|
Other noncurrent
assets
|
|
1,280
|
|
1,335
|
TOTAL ASSETS
|
|
$
223,557
|
|
$
217,875
|
LIABILITIES AND EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts
payable
|
|
$
15,783
|
|
$
19,120
|
Accrued
liabilities
|
|
42,511
|
|
47,069
|
Employee
compensation
|
|
4,229
|
|
5,071
|
Current portion of
long-term debt, net
|
|
2,514
|
|
3,186
|
Deferred
revenues
|
|
8,510
|
|
8,765
|
Other current
liabilities
|
|
13,734
|
|
13,117
|
Total current liabilities
|
|
87,281
|
|
96,328
|
Noncurrent liabilities
|
|
|
|
|
Long-term debt,
net
|
|
61,315
|
|
21,926
|
Deferred
revenues
|
|
10,074
|
|
10,473
|
Noncurrent operating
lease liabilities
|
|
6,409
|
|
6,595
|
Other noncurrent
liabilities
|
|
1,688
|
|
1,619
|
Total liabilities
|
|
166,767
|
|
136,941
|
Shareholders' equity
|
|
|
|
|
Share capital; $0.0001
par value; 500,000,000 shares authorized at March 31, 2024 and
December 31, 2023;
27,892,848 outstanding at March 31, 2024 and 27,834,908 outstanding
at December 31, 2023
|
|
3
|
|
3
|
Additional paid in
capital
|
|
155,137
|
|
152,768
|
Treasury shares, at
cost, 265,153 shares at March 31, 2024 and 260,236 shares at
December 31, 2023
|
|
(5,646)
|
|
(5,624)
|
Accumulated
deficit
|
|
(91,045)
|
|
(64,598)
|
Accumulated other
comprehensive loss
|
|
(1,659)
|
|
(1,615)
|
Total shareholders' equity
|
|
56,790
|
|
80,934
|
TOTAL LIABILITIES AND EQUITY
|
|
$
223,557
|
|
$
217,875
|
|
|
|
|
|
CAMBIUM NETWORKS CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(26,447)
|
|
$
(52,854)
|
|
$
4,276
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization of software and intangible assets
|
|
2,536
|
|
2,414
|
|
2,095
|
Amortization of debt
issuance costs
|
|
77
|
|
99
|
|
75
|
Share-based
compensation
|
|
2,586
|
|
2,811
|
|
2,875
|
Deferred income
taxes
|
|
3,694
|
|
8,800
|
|
(1,519)
|
Provision for
inventory excess and obsolescence
|
|
6,175
|
|
10,958
|
|
1,336
|
Other
|
|
687
|
|
(431)
|
|
(231)
|
Change in assets and
liabilities:
|
|
|
|
|
|
|
Receivables
|
|
2,385
|
|
9,399
|
|
(8,973)
|
Inventories
|
|
5,110
|
|
1,928
|
|
(12,601)
|
Prepaid
expenses
|
|
(6,161)
|
|
2,224
|
|
1,069
|
Accounts
payable
|
|
(3,581)
|
|
(7,141)
|
|
(1,474)
|
Accrued employee
compensation
|
|
(1,018)
|
|
(145)
|
|
(584)
|
Other assets and
liabilities
|
|
(1,690)
|
|
15,712
|
|
7,697
|
Net cash used in
operating activities
|
|
(15,647)
|
|
(6,226)
|
|
(5,959)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(1,767)
|
|
(1,228)
|
|
(1,569)
|
Purchases of
software
|
|
(1,250)
|
|
(1,118)
|
|
(1,537)
|
Net cash used in
investing activities
|
|
(3,017)
|
|
(2,346)
|
|
(3,106)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from issuance
of revolver debt
|
|
40,000
|
|
—
|
|
—
|
Repayment of term
loan
|
|
(1,313)
|
|
(656)
|
|
(656)
|
Payment of debt
issuance costs
|
|
—
|
|
(122)
|
|
—
|
Issuance of ordinary
shares under ESPP
|
|
—
|
|
578
|
|
—
|
Taxes paid related to
net share settlement of equity awards
|
|
(15)
|
|
(48)
|
|
(148)
|
Proceeds from share
option exercises
|
|
—
|
|
—
|
|
387
|
Net cash provided by
(used in) financing activities
|
|
38,672
|
|
(248)
|
|
(417)
|
Effect of exchange rate
on cash
|
|
(7)
|
|
1
|
|
16
|
Net increase (decrease)
in cash
|
|
20,001
|
|
(8,819)
|
|
(9,466)
|
Cash, beginning of
period
|
|
18,710
|
|
27,529
|
|
48,162
|
Cash, end of
period
|
|
$
38,711
|
|
$
18,710
|
|
$
38,696
|
|
|
|
|
|
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Income taxes
paid
|
|
$
116
|
|
$
960
|
|
$
204
|
Interest
paid
|
|
$
1,030
|
|
$
486
|
|
$
412
|
|
|
|
|
|
|
|
CAMBIUM NETWORKS CORPORATION
|
SUPPLEMENTAL FINANCIAL
INFORMATION
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
REVENUES BY PRODUCT
CATEGORY
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
Point-to-Multi-Point
|
|
$
19,421
|
|
$
22,575
|
|
$
22,292
|
Point-to-Point
|
|
14,411
|
|
21,874
|
|
18,008
|
Enterprise
|
|
7,163
|
|
(5,478)
|
|
35,656
|
Other
|
|
1,342
|
|
1,235
|
|
1,445
|
Total
Revenues
|
|
$
42,337
|
|
$
40,206
|
|
$
77,401
|
|
|
|
|
|
|
|
REVENUES BY REGION
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
North
America
|
|
$
25,049
|
|
$
27,056
|
|
$
47,593
|
Europe, Middle East and
Africa
|
|
8,410
|
|
3,418
|
|
19,708
|
Caribbean and Latin
America
|
|
4,892
|
|
5,303
|
|
3,685
|
Asia Pacific
|
|
3,986
|
|
4,429
|
|
6,415
|
Total
Revenues
|
|
$
42,337
|
|
$
40,206
|
|
$
77,401
|
|
|
|
|
|
|
|
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 and U.S. operations. 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
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
Net (loss)
income
|
|
$
(26,447)
|
|
$
(52,854)
|
|
$
4,276
|
Interest expense,
net
|
|
881
|
|
725
|
|
597
|
Provision for income
taxes
|
|
4,529
|
|
10,523
|
|
538
|
Depreciation and
amortization of software and intangible assets
|
|
2,536
|
|
2,414
|
|
2,095
|
EBITDA
|
|
(18,501)
|
|
(39,192)
|
|
7,506
|
Share-based
compensation
|
|
2,586
|
|
2,811
|
|
2,875
|
Restructuring and
other nonrecurring expenses
|
|
377
|
|
1,191
|
|
—
|
Adjusted
EBITDA
|
|
$
(15,538)
|
|
$
(35,190)
|
|
$
10,381
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
(36.7) %
|
|
(87.5) %
|
|
13.4 %
|
|
|
|
|
|
|
|
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
|
|
|
March 31, 2024
|
|
December 31, 2023
|
|
March 31, 2023
|
GAAP gross profit
|
|
$
8,685
|
|
$
(11,030)
|
|
$
39,660
|
Share-based
compensation expense
|
|
33
|
|
47
|
|
56
|
Amortization of
capitalized software costs
|
|
903
|
|
818
|
|
599
|
Restructuring and
nonrecurring expense
|
|
3
|
|
69
|
|
—
|
Non-GAAP gross profit
|
|
$
9,624
|
|
$
(10,096)
|
|
$
40,315
|
Non-GAAP gross margin
|
|
22.7 %
|
|
(25.1) %
|
|
52.1 %
|
|
|
|
|
|
|
|
GAAP research and development
expense
|
|
$
10,799
|
|
$
13,057
|
|
$
14,262
|
Share-based
compensation expense
|
|
945
|
|
1,005
|
|
1,269
|
Restructuring and other
nonrecurring expense
|
|
285
|
|
1,145
|
|
—
|
Non-GAAP research and development
expense
|
|
$
9,569
|
|
$
10,907
|
|
$
12,993
|
|
|
|
|
|
|
|
GAAP sales and marketing
expense
|
|
$
9,721
|
|
$
9,726
|
|
$
11,670
|
Share-based
compensation expense
|
|
508
|
|
547
|
|
700
|
Restructuring and other
nonrecurring expenses
|
|
18
|
|
34
|
|
—
|
Non-GAAP sales and marketing
expense
|
|
$
9,195
|
|
$
9,145
|
|
$
10,970
|
|
|
|
|
|
|
|
GAAP general and administrative
expense
|
|
$
7,510
|
|
$
6,207
|
|
$
6,667
|
Share-based
compensation expense
|
|
1,100
|
|
1,212
|
|
850
|
Restructuring and other
nonrecurring expenses
|
|
71
|
|
(57)
|
|
—
|
Non-GAAP general and administrative
expense
|
|
$
6,339
|
|
$
5,052
|
|
$
5,817
|
|
|
|
|
|
|
|
GAAP depreciation and
amortization
|
|
$
1,633
|
|
$
1,596
|
|
$
1,496
|
Amortization of
acquired intangibles
|
|
375
|
|
375
|
|
374
|
Non-GAAP depreciation and
amortization
|
|
$
1,258
|
|
$
1,221
|
|
$
1,122
|
|
|
|
|
|
|
|
GAAP operating (loss) income
|
|
$
(20,978)
|
|
$
(41,616)
|
|
$
5,565
|
Share-based
compensation expense
|
|
2,586
|
|
2,811
|
|
2,875
|
Amortization of
capitalized software costs
|
|
903
|
|
818
|
|
599
|
Amortization of
acquired intangibles
|
|
375
|
|
375
|
|
374
|
Restructuring and other
nonrecurring expenses
|
|
377
|
|
1,191
|
|
—
|
Non-GAAP operating (loss)
income
|
|
$
(16,737)
|
|
$
(36,421)
|
|
$
9,413
|
|
|
|
|
|
|
|
GAAP pre-tax (loss) income
|
|
$
(21,918)
|
|
$
(42,331)
|
|
$
4,814
|
Share-based
compensation expense
|
|
2,586
|
|
2,811
|
|
2,875
|
Amortization of
capitalized software costs
|
|
903
|
|
818
|
|
599
|
Amortization of
acquired intangibles
|
|
375
|
|
375
|
|
374
|
Restructuring and other
nonrecurring expenses
|
|
377
|
|
1,191
|
|
—
|
Non-GAAP pre-tax (loss) income
|
|
$
(17,677)
|
|
$
(37,136)
|
|
$
8,662
|
|
|
|
|
|
|
|
GAAP provision for income taxes
|
|
$
4,529
|
|
$
10,523
|
|
$
538
|
Valuation allowance
impacts
|
|
11,194
|
|
29,841
|
|
—
|
Tax rate
change
|
|
—
|
|
(2,845)
|
|
28
|
Tax impacts of share
vesting
|
|
58
|
|
169
|
|
(99)
|
Tax effect of Non-GAAP
adjustments
|
|
(1,060)
|
|
(1,039)
|
|
(770)
|
All other discrete
items
|
|
(687)
|
|
(6,662)
|
|
(472)
|
Non-GAAP (benefit) provision for income
taxes
|
|
$
(4,976)
|
|
$
(8,941)
|
|
$
1,851
|
Non-GAAP ETR
|
|
28.1 %
|
|
24.1 %
|
|
21.4 %
|
|
|
|
|
|
|
|
GAAP net (loss) income
|
|
$
(26,447)
|
|
$
(52,854)
|
|
$
4,276
|
Share-based
compensation expense
|
|
2,586
|
|
2,811
|
|
2,875
|
Amortization of
capitalized software costs
|
|
903
|
|
818
|
|
599
|
Amortization of
acquired intangibles
|
|
375
|
|
375
|
|
374
|
Restructuring and other
nonrecurring expenses
|
|
377
|
|
1,191
|
|
—
|
Non-GAAP adjustments to
tax
|
|
10,565
|
|
20,503
|
|
(544)
|
Tax effect of Non-GAAP
adjustments
|
|
(1,060)
|
|
(1,039)
|
|
(770)
|
Non-GAAP net (loss) income
|
|
$
(12,701)
|
|
$
(28,195)
|
|
$
6,811
|
Non-GAAP fully weighted basic
shares
|
|
27,893
|
|
27,844
|
|
27,397
|
Non-GAAP fully weighted diluted
shares
|
|
27,908
|
|
27,861
|
|
28,314
|
Non-GAAP net (loss) income per Non-GAAP basic
share
|
|
$
(0.46)
|
|
$
(1.01)
|
|
$
0.25
|
Non-GAAP net (loss) income per Non-GAAP diluted
share
|
|
$
(0.46)
|
|
$
(1.01)
|
|
$
0.24
|
|
|
|
|
|
|
|
Investor Inquiries:
Peter
Schuman, IRC
Vice President Investor, Industry Analyst & Public
Relations
Cambium Networks
+1 (847) 264-2188
peter.schuman@cambiumnetworks.com
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SOURCE Cambium Networks