Technology
Cambium Networks Reports Fourth Quarter and Full Year 2023 Financial Results
Published
9 months agoon
By
Revenues of $40.2 million, decreased 7% sequentially, and decreased 52% year-over-yearGross 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 millionNet 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 shareAdjusted 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 millionGAAP 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 millionGAAP operating loss between $9.2–$11.6 million; and non-GAAP operating loss between $5.3–$7.8 millionInterest expense, net of approximately $0.8 millionGAAP 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 shareAdjusted 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 meaningfulApproximately 28.0 million weighted average diluted shares outstanding
Cash requirements are expected to be as follows:
Paydown of debt: $0.7 millionCash interest expense: approximately $0.6 millionCapital 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 shareAdjusted 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
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Cangzhou Forum Seeks to Deepen Ties Between Chinese and Central/Eastern European SMEs
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November 10, 2024By
The 6th China-CEEC (Cangzhou) SME Cooperation Forum Launches
CANGZHOU, China, Nov. 10, 2024 /PRNewswire/ – A news report by Xinhuanet:
On November 7, the 6th China-Central and Eastern European Countries (CEEC) (Cangzhou) SME Cooperation Forum commenced in Cangzhou, Hebei Province. The forum was jointly hosted by the China Centre for Promotion of SME Development (ProSME) of the Ministry of Industry and Information Technology (MIIT), the Hebei Provincial Department of Industry and Information Technology, and Cangzhou Municipal People’s Government. Supporting organizations include the China International Cooperation Association of SMEs (CICASME) and the Office of Foreign Affairs Commission of the CPC Hebei Provincial Committee. The event was co-organized by the China-CEEC (Cangzhou) SME Cooperation Zone and the Cangzhou Municipal Bureau of Industry and Information Technology.
This year’s forum, themed “Deepening Cooperation and Sharing Opportunities,” combines both offline and online formats, with a primary focus on in-person engagement. Key activities include the Opening Ceremony and Keynote Forum, the Zero-Carbon Energy and Green Industry Innovation Forum, the International Forum on Remanufacturing Industry, the International Forum on Aviation Industry and Low Altitude Economy, and the SMEs’ Cross-border Collaboration and Matchmaking Meeting, and the European Segment of the 2024 International SME Innovation and Entrepreneurship Competition.
Throughout the forum, leading experts and dignitaries from around the world delivered speeches under the theme ‘New Path for Pragmatic Cooperation between SMEs of China and CEECs.’ They emphasized the critical roles of sustainable energy, the digital economy, and trade and logistics in strengthening ties between China and Central and Eastern European countries. In parallel, the event featured a range of innovative activities aimed at building an international platform to foster industrial cooperation and exchanges among SMEs from the participating nations.
At the Zero-Carbon Energy and Green Industry Innovation Forum, participating specialists and researchers engaged in discussions on developing a zero-carbon economy. They explored new opportunities, technologies, models, and challenges associated with lithium, hydrogen, and energy storage, with the aim of collaboratively advancing the green economy.
By attracting leading European innovation projects, the European division of the 2024 International SME Innovation and Entrepreneurship Competition has successfully transformed a number of innovative ideas into real-world applications, enhancing the collaborative development of new technologies between Chinese and European SMEs.
The China-CEEC (Cangzhou) SME Cooperation Forum, now in its sixth year, has emerged as Hebei Province’s leading foreign affairs initiative. The forum has drawn high-profile participants from Slovakia, Serbia, Germany, Finland, and neighboring countries, as well as ambassadors to China, and executives from leading Chinese and international industry associations and businesses. It has also spurred numerous collaborative projects between China and Central and Eastern European countries, enhancing cultural exchanges, educational partnerships, and technology transfers.
Cangzhou is positioning the forum as a premier, open platform designed to be engaging, impactful, and competitive. The city’s objective is to significantly improve and sustain high-level interactions and collaborations between China and Central and Eastern European countries across the manufacturing, technology, investment and trade sectors.
Photo – https://mma.prnewswire.com/media/2552716/IMG_5336.jpg
View original content:https://www.prnewswire.co.uk/news-releases/cangzhou-forum-seeks-to-deepen-ties-between-chinese-and-centraleastern-european-smes-302300630.html
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ZURU backed BONKERS and Millie Moon brands achieve extraordinary recognition at the US 2024 Target Vendor Summit
Published
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November 10, 2024By
The ZURU-Backed Pet Treat and Nappy Companies Both Continue Record-Breaking Growth in the US Market
AUCKLAND, New Zealand, Nov. 11, 2024 /PRNewswire/ — ZURU Edge brands, BONKERS and Millie Moon, are proud to announce that they have been recognized for Demand Generation at Target’s 2024 Essentials and Beauty Vendor Summit. The Target Vendor Summit honors a select group of vendors and partners who have demonstrated outstanding performance in driving traffic to Target stores. These brands are recognized for strong brand, content, and media strategies, packaging, and a consumer experience that drives repeat sales through product superiority.
Target is one of the largest retail chains in the United States, boasting over 1,900 stores across the country and generating approximately USD $100 billion in annual revenue. Known for its wide range of affordable products, from groceries and clothing to electronics and home goods, it caters to millions of American shoppers each week. An alternative to Walmart, Target has a distinct brand image, known for its clean stores, trendy merchandise, and iconic red bullseye logo.
This recognition is particularly special as New Zealand’s ZURU Edge brands were represented in 2 out of the 5 categories within consumables, and BONKERS was the only national, non-exclusive-to-Target brand to win across all categories.
Millie Moon Nappies are exclusive to Target in the US, and since launching in 2021, they have sold over 6.7 million packs, quickly becoming Target’s fastest-growing nappy brand. Millie Moon is the #1 most productive nappy brand at Target retailers, in both dollars and unit sales. Parents are passionate about Millie Moon nappies, as reflected in the 16,000+ 5-star reviews on Target.com, and best-in-class repeat purchase rates – In a Numerator study, Millie Moon holds the top spot for trip frequency within nappies, above Target’s other leading nappy brands.
BONKERS launched in October 2022 in response to the growing share of Millennial and Gen Z pet owners. The brand is part of the ZURU owned Rhodes Pet Science portfolio of brands and was built first-and-foremost to foster the bond between pets and their people, based on the insight that new generation pet parents expect more from their petcare brands. In just over 2 years, it has grown from a non-existent brand to one sitting on shelves in 13,500 stores across 3 countries with distribution points growing at 50% year-over-year. Within 1 week, it became the most-liked pet treats brand on TikTok globally, with over 80 million views on the BONKERS page and over 700 community posts under the #betterwhenitsBONKERS hashtag. The BONKERS award-winning marketing campaigns, matched with products that deliver on quality and affordable pricing have driven tremendous growth: 19% of total US industry cat treat growth last year with just 1.6% of shelf space. The momentum continues, with viral product BONKERS Purrpops hitting 8 of the top 25 emerging Google search terms against the topic ‘cat treat’ in the US.
About Rhodes Pet Science:
Rhodes Pet Science is reimagining the future of pet care by engineering products that completely redefine what is possible. Its mission is to build a new generation of brands to better serve modern consumers: brands loved by pets and their people. Rhodes Pet Science’s portfolio of brands include: BONKERS, NOOD, Goodlands, Smart Box and Business Litter. Right now, Rhodes Pet Science is the fastest-growing pet food company in the world.
Rhodes Pet Science is proudly part of the ZURU Group. One of the fastest-growing consumer goods companies in the world, ZURU has established brands in 120+ markets worldwide, with a team of 5000+ employees based out of 26 global offices.
For more on Rhodes Pet Science, please visit: www.rhodespetscience.com
About Millie Moon
Millie Moon launched in 2021 exclusively at Target in the US and expanded to Loblaws in Canada in 2023. The brand has made it their mission to provide a range of luxury nappies and sensitive wipes that are expertly crafted, luxuriously soft and designed to perform, all at an affordable price. They are passionate in their belief that every child deserves the best. Their award-winning products are available in over 2,000 stores in the US and Canada. As a company, they are also proud to support Reach Out and Read, an early literacy nonprofit helping children on their reading journey.
For more on Millie Moon, please visit: https://mymilliemoon.com/
About ZURU
From its origins in toys, ZURU Group has grown to six consumer vertical brands, operating out of 26 offices worldwide, with products sold in 120+ markets.
ZURU is on a mission to disrupt across industries, challenge the status quo and catalyze change through radical innovation and automation advances. This is evident in different pillars of the company: ZURU Toys are reimagining what it means to play; ZURU Tech is reimagining the future of housing by leading the next building revolution; ZURU Edge is reimaging new generation FMCG brands to better serve modern household consumers.
For more on ZURU, please visit: https://zuru.com/
For More Information:
Nicole Daley / Daley Public Relations
nicole@daleypr.com / 415.408.8664
View original content:https://www.prnewswire.com/apac/news-releases/zuru-backed-bonkers-and-millie-moon-brands-achieve-extraordinary-recognition-at-the-us-2024-target-vendor-summit-302300578.html
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HONG KONG, Nov. 10, 2024 /PRNewswire-PRWeb/ — PropXP, a new proprietary trading firm, is excited to announce its official launch on November 5, 2024, offering traders worldwide a unique and accessible approach to prop trading. With a focus on providing traders of all experience levels with attainable challenges and unparalleled resources, PropXP aims to reshape the prop trading landscape.
PropXP’s lineup includes both One-Step and Two-Step challenges, allowing traders to select a path that best aligns with their goals. Challenge prices range from just $30 for a $3,000 account up to $499 for a $100,000 account, making it possible for more traders to participate and advance their careers. Distinguishing itself from competitors, PropXP does not enforce a high watermark, a feature that allows traders to keep their focus on consistent growth without restrictive conditions.
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In addition to its flexible challenge parameters, PropXP offers a comprehensive trading academy filled with educational resources, including in-depth tutorials and guides. With a commitment to accessibility, PropXP is poised to serve as a valuable platform for traders looking to refine their skills and achieve sustainable success in the financial markets.
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For more information, please visit https://propxp.com
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Giorgos Piskopianos, PropXP, 44 7789874973, social@propxp.com, https://propxp.com
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