BigBand Cuts 6% Of Work Force, Lowers 2010 Outlook
Company Cites Slower Sales of IP Video Solutions
By Todd Spangler -- Multichannel News, 5/6/2010 5:18:01 PM
BigBand Networks trimmed its work force by 6%, eliminating about 30 full-time employees and contractors, as the video-systems vendor saw sales plunge 27% in the first quarter of 2010.
BigBand's revenue for the first quarter of 2010 was $32.2 million, down from $43.9 million in the year-ago period. Net loss was $8.8 million compared to net income of $2.3 million for the first quarter of 2009.
In the quarter, BigBand said it experienced slower sales primarily related to IP video solutions and that it expects the slower orders in the segment to continue for the remainder of the year. As a result, the company currently expects revenue for fiscal year 2010 to be $115 million to $125 million, compared with its previous guidance of roughly $153 million to $154 million.
"We are disappointed with our results announced today and have taken actions to preserve cash while we continue to invest in solutions for longer-term growth," BigBand president and CEO Amir Bassan-Eskenazi said in a statement. "The market drivers for digital video networking remain strong -- HDTV, IPTV and increasingly 3DTV. These advanced media technologies enable enhanced consumer experiences and are the major drivers for our expected growth over the longer-term."
BigBand is one of the leading providers of switched digital video solutions, with customers including Time Warner Cable, Cox Communications, Charter Communications and Cablevision Systems. Analysts have said that SDV deployments may have peaked for BigBand.
BigBand said the layoffs and other cost-cutting measures are expected to yield annualized cost savings of approximately $7 million and result in one-time severance and restructuring charges of approximately $1.3 million in the second quarter 2010.
The company ended the first quarter with $165.5 million of cash and investments.
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