British set-top maker Pace posted revenue of $2.31 billion for the year ended Dec. 31, 2011, up 11.9%, while net profit dropped by 50% amid supply-chain problems and other operational issues.
Pace reported profit before tax of $54.7 million, compared with $110.2 million in 2010.
Excluding recent acquisitions, Pace's organic revenue decreased 7.1% for the full year. In 2010, Pace acquired 2Wire, a supplier of DSL home gateways for AT&T's U-verse TV and other telcos. Other major customers include Comcast, BT, Liberty Global's UPC Broadband, Sky Mexico and DirecTV PanAmericana.
"Our focus on operational improvement and efficiency is already starting to deliver tangible results and will contribute further to our future competitive advantage," Pace CEO Mike Pulli said in announcing results Tuesday. "We are now firmly focused on execution and delivering a fitter, more profitable business with strong cash flow."
Pulli, formerly head of Pace Americas, was elevated to chief executive in December after the company announced CEO Neil Gaydon was stepping down.
Pace, based in Saltaire, West Yorkshire, U.K., has about 2,300 employees worldwide in location including the U.S., France, India and China.
The company said it was addressing challenges in 2011, including improving inventory controls and reorganizing its European operations.
Pace blamed a hard-disk drive shortage for disrupting sales last year, following major flooding in Thailand -- a problem that persists. The company expects 2012 revenue to be "broadly flat," while the continuing HDD supply issues will reduce earnings before interest, tax and amortization between $25 million and $35 million.
In 2011, Pace shipped 21.8 million set-top boxes, representing $1.78 billion in revenue. The company sold 5.2 million residential gateways, generating $434 million in sales, and pulled in about $100 million in software and services revenue.
Sales to North American operators fell to $1.07 billion, down from about $1.2 billion in 2010, because of slower DVR sales and "normalization of our leadership position on certain customer specific products," Pace said in discussing the financial results.
Last month, Pace announced a deal with TiVo to port TiVo's software and user interface to its set-top boxes and gateways. Under the agreement, Pace has licensed TiVo's Hardware Porting Kit and will work with TiVo to build a "TiVo-verified" platform, which will provide pay TV operators that have a licensing deal with TiVo the option of using Pace hardware.