Cambium Networks Corp [CMBM] Filings

10-Q 1 cmbm-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-38952

CAMBIUM NETWORKS CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Cayman Islands		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

c/o Cambium Networks, Inc.
2000 Center Drive, Suite East A401 Hoffman Estates, Illinois 60192		(345) 814-7600
(Address of principal executive offices, including zip code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Ordinary shares, $0.0001 par value

    CMBM

    Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2024, the registrant had 28,212,171 shares of ordinary shares, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Shareholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

Note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, 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.

In some cases, forward-looking statements may be identified by terms such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q 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 quarterly report and are subject to a number of risks, uncertainties and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, they should not be relied upon 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 successfully comply with or obtain a waiver of compliance with the financial covenants under our secured credit facilities;

•

the sufficiency of our cash resources and needs for additional financing;

•

our ability to predict and respond to emerging technological trends and network operators' changing needs;

•

our ability to forecast future demand or the level of inventory in our channel, which could adversely affect our commitments to our suppliers and our channel partners' ability to effectively manage inventory of our products, timely resell our products or estimate expected future demand;

•

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;

•

risks caused by political tensions around the world including the current war in Ukraine as well as tensions between the United States and China and events in Israel and Gaza;

•

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 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 of components and other parts required to manufacture our products;

•

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;

•

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 attacks;

•

our channel partners' inability to effectively manage inventory of our products, timely resell our products or estimate expected future demand;

•

credit risk of our channel partners, which could adversely affect their ability to purchase or pay for our products;

•

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;

•

our inability to obtain intellectual property protections for our products; and

•

our ability to maintain our listing on the Nasdaq Global Market.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

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.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Cambium Networks Corporation

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)


	December 31,			June 30,
	2023			2024
				(Unaudited)
ASSETS
Current assets
Cash	$	18,710		$	42,574
Receivables, net of credit losses of $283 and $564		64,103			56,680
Inventories, net		66,878			49,969
Income taxes receivable		222			4,651
Prepaid expenses		6,589			12,057
Other current assets		6,069			6,236
Total current assets		162,571			172,167
Noncurrent assets
Property and equipment, net		12,879			14,978
Software, net		11,985			12,989
Operating lease assets		7,894			6,931
Intangible assets, net		7,675			6,926
Goodwill		9,842			9,842
Deferred tax assets, net		3,694			—
Other noncurrent assets		1,335			1,258
TOTAL ASSETS	$	217,875		$	225,091
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	19,120		$	16,986
Accrued liabilities		47,069			46,455
Employee compensation		5,071			4,303
Current portion of long-term debt, net		3,186			3,173
Deferred revenues		8,765			8,261
Other current liabilities		13,117			10,114
Total current liabilities		96,328			89,292
Noncurrent liabilities
Long-term debt, net		21,926			65,685
Deferred revenues		10,473			10,338
Noncurrent operating lease liabilities		6,595			7,046
Other noncurrent liabilities		1,619			1,766
Total liabilities		136,941			174,127
Shareholders' equity
Share capital; $0.0001 par value; 500,000,000 shares authorized at December 31, 2023 and June 30, 2024; 28,095,144 shares issued and 27,834,908 outstanding at December 31, 2023 and 28,478,209 shares issued and 28,208,596 outstanding at June 30, 2024		3			3
Additional paid in capital		152,768			158,578
Treasury shares, at cost, 260,236 shares at December 31, 2023 and 269,613 shares at June 30, 2024		(5,624	)		(5,660	)
Accumulated deficit		(64,598	)		(100,188	)
Accumulated other comprehensive loss		(1,615	)		(1,769	)
Total shareholders' equity		80,934			50,964
TOTAL LIABILITIES AND EQUITY	$	217,875		$	225,091

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Cambium Networks Corporation

Condensed Consolidated Statements of Operations

(in thousands, except for share and per share data)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2024			2023			2024
Revenues	$	59,542		$	45,946		$	136,943		$	88,283
Cost of revenues		30,300			31,536			68,041			65,188
Gross profit		29,242			14,410			68,902			23,095
Operating expenses
Research and development		13,008			9,149			27,270			19,948
Sales and marketing		11,528			9,706			23,198			19,427
General and administrative		5,836			5,988			12,503			13,498
Depreciation and amortization		1,573			1,669			3,069			3,302
Total operating expenses		31,945			26,512			66,040			56,175
Operating (loss) income		(2,703	)		(12,102	)		2,862			(33,080	)
Interest expense, net		579			1,304			1,176			2,185
Other expense, net		64			3			218			62
(Loss) income before income taxes		(3,346	)		(13,409	)		1,468			(35,327	)
(Benefit) provision for income taxes		(704	)		(4,266	)		(166	)		263
Net (loss) income	$	(2,642	)	$	(9,143	)	$	1,634		$	(35,590	)

(Loss) earnings per share
Basic	$	(0.10	)	$	(0.33	)	$	0.06		$	(1.28	)
Diluted	$	(0.10	)	$	(0.33	)	$	0.06		$	(1.28	)
Weighted-average number of shares outstanding to compute net (loss) earnings per share
Basic		27,432,705			27,902,956			27,387,112			27,876,280
Diluted		27,432,705			27,902,956			28,315,457			27,876,280

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Cambium Networks Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2024			2023		2024
Net (loss) income	$	(2,642	)	$	(9,143	)	$	1,634	$	(35,590	)
Other comprehensive income (loss)
Foreign currency translation adjustment		14			(110	)		100		(154	)
Comprehensive (loss) income	$	(2,628	)	$	(9,253	)	$	1,734	$	(35,744	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Cambium Networks Corporation

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands)

(unaudited)


	Three Months Ended June 30, 2023
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated equity			Accumulated other comprehensive loss			Total shareholders' equity
Balance at March 31, 2023		27,397		$	3	$	142,009	$	(5,133	)	$	17,098		$	(1,441	)	$	152,536
Net loss		—			—		—		—			(2,642	)		—			(2,642	)
Share-based compensation		—			—		3,312		—			—			—			3,312
Issuance of ordinary shares under ESPP		88			—		1,102		—			—			—			1,102
Issuance of vested shares		133			—		—		—			—			—			—
Treasury shares withheld for net settlement		(23	)		—		—		(376	)		—			—			(376	)
Proceeds from exercise of share options		8			—		105		—			—			—			105
Foreign currency translation		—			—		—		—			—			14			14
Balance at June 30, 2023		27,603		$	3	$	146,528	$	(5,509	)	$	14,456		$	(1,427	)	$	154,051

	Six Months Ended June 30, 2023
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated equity			Accumulated other comprehensive loss			Total shareholders' equity
Balance at December 31, 2022		27,313		$	3	$	138,997	$	(4,922	)	$	12,822		$	(1,527	)	$	145,373
Net income		—			—		—		—			1,634			—			1,634
Share-based compensation		—			—		5,937		—			—			—			5,937
Issuance of ordinary shares under ESPP		88			—		1,102		—			—			—			1,102
Issuance of vested shares		178			—		—		—			—			—			—
Treasury shares withheld for net settlement		(35	)		—		—		(587	)		—			—			(587	)
Proceeds from exercise of share options		59			—		492		—			—			—			492
Foreign currency translation		—			—		—		—			—			100			100
Balance at June 30, 2023		27,603		$	3	$	146,528	$	(5,509	)	$	14,456		$	(1,427	)	$	154,051

	Three Months Ended June 30, 2024
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated deficit			Accumulated other comprehensive loss			Total shareholders' equity
Balance at March 31, 2024		27,893		$	3	$	155,137	$	(5,646	)	$	(91,045	)	$	(1,659	)	$	56,790
Net loss		—			—		—		—			(9,143	)		—			(9,143	)
Share-based compensation		—			—		2,778		—			—			—			2,778
Issuance of ordinary shares under ESPP		279			—		663		—			—			—			663
Issuance of vested shares		41			—		—		—			—			—			—
Treasury shares withheld for net settlement		(4	)		—		—		(14	)		—			—			(14	)
Proceeds from exercise of share options		—			—		—		—			—			—			—
Foreign currency translation		—			—		—		—			—			(110	)		(110	)
Balance at June 30, 2024		28,209		$	3	$	158,578	$	(5,660	)	$	(100,188	)	$	(1,769	)	$	50,964

	Six Months Ended June 30, 2024
	Share Capital
	Shares			Amount		Additional paid in capital		Treasury shares			Accumulated deficit			Accumulated other comprehensive loss			Total shareholders' equity
Balance at December 31, 2023		27,835		$	3	$	152,768	$	(5,624	)	$	(64,598	)	$	(1,615	)	$	80,934
Net loss		—			—		—		—			(35,590	)		—			(35,590	)
Share-based compensation		—			—		5,147		—			—			—			5,147
Issuance of ordinary shares under ESPP		279			—		663		—			—			—			663
Issuance of vested shares		104			—		—		—			—			—			—
Treasury shares withheld for net settlement		(9	)		—		—		(36	)		—			—			(36	)
Proceeds from exercise of share options		—			—		—		—			—			—			—
Foreign currency translation		—			—		—		—			—			(154	)		(154	)
Balance at June 30, 2024		28,209		$	3	$	158,578	$	(5,660	)	$	(100,188	)	$	(1,769	)	$	50,964

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Cambium Networks Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2023			2024
Cash flows from operating activities:
Net income (loss)	$	1,634		$	(35,590	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		2,124			2,324
Amortization of software and intangible assets		2,193			2,796
Amortization of debt issuance costs		154			155
Share-based compensation		5,937			5,147
Deferred income taxes		(3,324	)		3,694
Provision for inventory excess and obsolescence		1,060			8,559
Other		(162	)		444
Change in assets and liabilities:
Receivables		192			4,059
Inventories		(26,340	)		8,350
Prepaid expenses		3,803			(5,477	)
Income taxes receivable		27			(4,431	)
Accounts payable		(1,340	)		(2,732	)
Accrued employee compensation		(1,515	)		(631	)
Accrued liabilities		615			2,509
Other assets and liabilities		4,462			(2,422	)
Net cash used in operating activities		(10,480	)		(13,246	)
Cash flows from investing activities:
Purchases of property and equipment		(2,236	)		(4,081	)
Purchases of software		(3,333	)		(3,106	)
Net cash used in investing activities		(5,569	)		(7,187	)
Cash flows from financing activities:
Proceeds from issuance of revolver debt		—			45,000
Repayment of term loan		(1,313	)		(1,313	)
Issuance of ordinary shares under ESPP		1,102			663
Taxes paid from shares withheld		(433	)		(32	)
Proceeds from share option exercises		492			—
Net cash (used in) provided by financing activities		(152	)		44,318
Effect of exchange rate on cash		17			(21	)
Net (decrease) increase in cash		(16,184	)		23,864
Cash, beginning of period		48,162			18,710
Cash, end of period	$	31,978		$	42,574

Supplemental disclosure of cash flow information:
Income taxes paid	$	2,843		$	2,347
Interest paid	$	880		$	1,952

Non-cash investing and financing activities:
Increase in property, equipment and software unpaid or accrued in liabilities	$	113		$	290
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	1,865		$	—
Debt issuance costs incurred but not yet paid	$	—		$	275

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Cambium Networks Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Business and significant accounting policies

Business

Cambium Networks Corporation (“Cambium” or “Cambium Networks” or the “Company”), incorporated under the laws of the Cayman Islands, is a holding company whose principal operating entities are Cambium Networks, Ltd. (UK), Cambium Networks, Inc. (USA), and Cambium Networks Private Limited (India). On June 26, 2019, the Company completed an Initial Public Offering and the Company's ordinary shares began trading on the Nasdaq Global Market.

Cambium Networks Corporation and its wholly owned subsidiaries design, develop, and manufacture fixed wireless and fiber broadband and enterprise networking infrastructure solutions that are used by businesses, governments, and service providers in urban, suburban and rural environments. Cambium's products simplify and automate the design, deployment, optimization, and management of broadband and Wi-Fi access networks through intelligent automation.

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Cambium Networks Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements as of June 30, 2024, and for the three-month and six-month periods ended June 30, 2023 and 2024, and the related notes are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, and, in the opinion of management, reflect all adjustments, which comprise only normal recurring adjustments necessary to state fairly the Company’s financial position as of June 30, 2024 and results of operations for the three-month and six-month periods ended June 30, 2023 and 2024 and cash flows for the six-month periods ended June 30, 2023 and 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K and filed with the SEC on March 15, 2024. The results of operations for the three-month and six-month periods ended June 30, 2024 are not necessarily indicative of the operating results to be expected for the full year.

The Company has reclassified certain prior period amounts in the condensed consolidated statements of cash flows to conform to the current period's presentation. Specifically, within the condensed consolidated statements of cash flows, changes in Income taxes receivable has been reclassified from “Other assets and liabilities” to “Income taxes receivable”. The reclassifications do not affect previously reported cash flows from operating activities in the condensed consolidated statements of cash flows.

Going Concern

In accordance with the accounting guidance related to the presentation of financial statements, when preparing financial statements for each annual and interim reporting period, management evaluates whether there are conditions or events that, when considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its assessment, management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and conditional and unconditional obligations due over the next twelve months, as well as other factors including the markets in which the Company competes and the current customer demand for the Company’s products.

As of June 30, 2024 and through the date of filing this Quarterly Report, the Company was in compliance with all of its payment obligations and the financial covenants under its Amended Credit Agreement. The Company’s obligations under the Amended Credit Agreement do not mature and become due and payable until November 17, 2026. Please refer to Note 6. Debt, regarding the Company’s debt outstanding under its credit facilities with Bank of America.

The Company is actively taking actions to improve its profitability and ensure future compliance with applicable financial covenants, including acceleration of collection of receivables, deferral of expenditures, cost reductions to align the Company’s cost structure with current revenue levels and sales of excess inventory. In addition, the Company continues to focus on operating efficiency and reducing discretionary spending. The Company believes these actions, together with its existing cash balances, provide it with the financial flexibility needed to meet its obligations as they come due over the next twelve months. However, this conclusion depends in part on the Company’s expectations regarding macro-conditions in the markets in which it competes, customer acceptance and purchases of the Company’s products, buying decisions by the Company’s distributors and other factors that are not within the Company’s control. Based on the Company’s current forecasts, the Company is projecting future noncompliance with its financial

covenants within the next twelve months, which would result in a non-payment event of default under the Amended Credit Agreement. Such a default would afford the lenders thereunder the right to declare the amounts outstanding thereunder immediately due and payable, and the Company may not be able to obtain a waiver of such a default or otherwise refinance such indebtedness. Due to these uncertainties, management concluded that substantial doubt exists with respect to the Company's ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Update to Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies disclosed in the 2023 Form 10-K, Part II, Item 8.

Recently issued accounting standards not yet adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required in an entity's income tax rate reconciliation table and requires disclosure of income taxes paid in both U.S. and foreign jurisdictions. The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendment requires disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit of loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets. The new guidance also requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission's ("SEC") Disclosure Update and Simplification Initiative. The amendments in this update require modification of certain disclosure and presentation requirements for a variety of ASU topics in response to the SEC's Release No. 33-10532. The effective date for each amended topic in the ASC is the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendment will be removed from the Codification and not become effective. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

Note 2. Balance sheet components

Inventories, net

Inventories, net consisted of the following (in thousands):


	December 31,			June 30,
	2023			2024
				(unaudited)
Finished goods	$	69,428		$	60,939
Raw materials		21,271			21,090
Gross inventory		90,699			82,029
Less: Excess and obsolescence reserve		(23,821	)		(32,060	)
Inventories, net	$	66,878		$	49,969

The decrease in finished goods was primarily in our PMP and Enterprise products. Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, and market conditions and judgment about the anticipated consumption and our ability to sell the inventory. At December 31, 2023 and June 30, 2024, excess and obsolescence reserves were $23.8 million and $32.1 million, respectively. The increase in the reserve in 2024 was mostly driven by lower demand, mostly for PMP products.

Accrued liabilities

Accrued liabilities consisted of the following (in thousands):


	December 31,		June 30,
	2023		2024
			(unaudited)
Accrued goods and services	$	7,787	$	5,329
Accrued loss on supplier commitments		12,949		17,767
Accrued inventory purchases		2,768

Cambium Networks Corp [CMBM] Filings
10-Q	[2024-08-09]
10-Q	[2024-05-10]
10-K	[2024-03-15]
10-Q	[2023-11-03]
10-Q	[2023-08-02]
10-Q	[2023-05-09]
10-K	[2023-02-27]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-02-24]
10-Q	[2021-11-10]
10-Q	[2021-08-09]
10-Q	[2021-05-07]
10-K	[2021-03-01]
10-Q	[2020-11-06]
10-Q	[2020-08-12]
10-Q	[2020-05-13]
10-K	[2020-03-24]
10-Q	[2019-11-08]
10-Q	[2019-08-12]
S-1	[2019-05-29]