BigBand trims workforce as Q1 revenue drops
In order to help make amends for a disappointing first quarter, BigBand Networks said it’s cutting about 30 full-time employees, which amounts to 6 percent of its workforce.
BigBand’s first-quarter revenue was $32.2 million, which was a drop off from the $43.9 million it posted in the same quarter a year ago. Blair King, a senior research analyst with Avondale Partners, had estimated revenue of $34.4 million for BigBand in the first quarter.
BigBand's net loss for the first quarter was $8.8 million, compared with net income of $2.3 million in the first quarter of 2009.
Redwood City, Calif.-based BigBand Networks ended the first quarter of 2010 with $165.5 million of cash and investments.
BigBand said results for the first quarter were hurt by slower order activities and lower gross margins as a result of product mix. Going forward, the company expects the slowdown in orders, primarily related to IP video solutions, to continue for the remainder of the year. As a result, the company currently expects revenues for fiscal year 2010 to be in the range of $115 million to $125 million instead of the previous estimate of $153 million to $154 million.
BigBand said it has taken a number of steps, including the workforce cuts, to realign its expenses with its near-term revenue outlook. The steps 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 of 2010.
“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,” commented Amir Bassan-Eskenazi, president and CEO of BigBand Networks. “BigBand has distinguished itself as a technology leader and innovator in supporting our customers’ evolving video network requirements. The market drivers for digital video networking remain strong – HDTV, IPTV and increasingly 3-D TV. These advanced media technologies enable enhanced consumer experiences and are the major drivers for our expected growth over the longer-term.”
BigBand was an early pioneer of switched digital video, and it counts Buckeye CableSystem, Cox Communications, Time Warner Cable, Charter Communications and Cablevision among its SDV customers.