Cupertino, Calif. -- Cable-modem vendor Hybrid
Networks Inc. restated its first-quarter results negatively last week to reflect rising
product returns and debt-collection troubles.
Hybrid also said its chief financial officer, Dan Steimle,
resigned, and CEO Carl Ledbetter has assumed those duties temporarily. The company added
that it is reviewing its 1997 results, which might also have to be restated.
Hybrid filed its 10Q quarterly report last Monday, after
delaying the filing while it examined rising product returns and problems among wireless
cable customers. The vendor has become increasingly dependent on wireless cable operators,
which accounted for 60 percent of its gross sales in the first quarter, up from 30 percent
for all of 1997.
Wireless operators need Hybrid's core asymmetric
modems, which use phone lines for outgoing data, while most wireline cable operators
prefer two-way modems. But wireless MSOs are under severe financial pressure, as they try
to crack the high-speed-data market.
Hybrid reported first-quarter net sales of $915,000, down
82 percent from $5.1 million in the fourth quarter of 1997, as its reserve for product
returns rose to $2.4 million from $800,000, and $1 million was added to its reserve for
Hybrid's quarterly net loss rose to $5.2 million from
the $3.7 million loss that it initially reported April 14.
The company also suffered from delays in shipping its new
two-way-transmission product. It estimated that those delays cut first-quarter revenue by
about $300,000. And a major customer canceled a $400,000 order during the quarter because
of litigation involving that customer. The customer wasn't named, but analysts
previously identified it as Jones Intercable Inc., which was forced to halt launches of
its Jones Internet Channel high-speed-data service because of a lawsuit filed by
shareholder BCI Telecom Holding Inc. (BTH).
Hybrid said it also reduced its revenue total by about $1
million because that amount of product had been shipped to distributors, but Hybrid had
not been paid yet.