Roth Capital Cuts Airspan Networks to Hold

From Standard & Poor's Equity Research

Roth Capital downgraded Airspan Networks (AIRN) to hold from buy, explaining that he's becoming more concerned about the company's balance sheet.

News hit recently that the company amended its contract with the company Yozan.

Analyst Dave Kang says the Yozan situation with auditors is not resolved, which is a major overhang for Airspan stock. Although about $16.8 million of equipment already delivered to Yozan against cash payments is deemed accepted, he says this may not be recognized in the second quarter. Also about 40% of the $42.9 million contract will be delayed, subject to revised payment. He says that as a result, inventory level will rise to reflect components already ordered from subcontractors. He notes the company expects to seek working capital of $10 million.