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8-K - FORM 8-K - BigBand Networks, Inc. | f57119e8vk.htm |
EX-10.1 - EX-10.1 - BigBand Networks, Inc. | f57119exv10w1.htm |
Exhibit 99.1
BigBand Announces Third Quarter 2010 Results
REDWOOD CITY, Calif., October 19, 2010 (BUSINESS WIRE) BigBand Networks, Inc., (NASDAQ:
BBND), a leader in digital video networking, today reported financial results for the third quarter
ended September 30, 2010.
Revenues for the third quarter of 2010 were $26.8 million, compared to $22.2 million for the third
quarter of 2009. GAAP net loss for the third quarter of 2010 was $7.3 million, or ($0.11) per
share, compared to GAAP net loss of $10.9 million, or ($0.16) per diluted share, reported in the
third quarter of 2009.
On a non-GAAP basis, the Company reported a net loss of $4.0 million, or ($0.06) per share, in the
third quarter of 2010. This compares to a net loss of $5.9 million, or ($0.09) per diluted share,
reported in the third quarter of 2009. Third quarter 2010 non-GAAP results exclude $3.3 million in
stock-based compensation expense, $0.1 million restructuring benefits and related income taxes. Our
non-GAAP results reflect the adjustments described in the Reconciliation of GAAP to non-GAAP
Financial Measures attached to this press release.
The Company closed the third quarter of 2010 with $152.3 million in cash and marketable securities.
Our third quarter financial results were in line with the outlook we provided on August 4. We
continue to invest in our product portfolio and recently achieved major milestones, including the release of
our next generation edge QAM on our multi service platform, commented Amir Bassan-Eskenazi,
President and CEO of BigBand Networks. Our latest technology converges our QAM innovation with our
media services platform to enable new services including personal TV, advanced advertising and
highly efficient bandwidth management. We remain focused on bringing new products to market,
expanding our geographic reach and improving our financial position going forward.
Fourth Quarter 2010 Business Outlook:
For the fourth quarter of 2010, management provides the following outlook:
| Net revenues are expected to be in the range of $25.0 million to $28.0 million. | ||
| GAAP gross margins are expected to be in the range of 50% to 52%. | ||
| Non-GAAP gross margins are expected to be in the range of 52% to 54%. | ||
| GAAP operating expenses are expected to be in the range of $21.0 million to $21.5 million. | ||
| Non-GAAP operating expenses, excluding stock-based compensation expense, are expected to be in the range of $18.5 million to $19.0 million. | ||
| GAAP net loss per share is expected to be in the range of ($0.09) to ($0.11). |
| Non-GAAP net loss per share is expected to be in the range of ($0.05) to ($0.07). |
The following table shows our non-GAAP outlook for the quarter ending December 31, 2010 reconciled
to our GAAP outlook.
Estimated Loss per Share | ||||||||
Low | High | |||||||
GAAP net loss |
($0.09 | ) | ($0.11 | ) | ||||
Stock-based compensation and related income
taxes |
0.04 | 0.04 | ||||||
Non-GAAP net loss |
($0.05 | ) | ($0.07 | ) | ||||
Non-GAAP Financial Measures
BigBand reports all financial information required in accordance with U.S. generally accepted
accounting principles (GAAP), but we believe that evaluating our ongoing operating results may be
difficult to understand if limited to reviewing only GAAP financial measures. Many of our investors
have requested that we disclose non-GAAP information because it is useful in understanding our
performance as it excludes non-cash and other one-time charges or benefits that many investors feel
may obscure our true operating results. Likewise, management uses non-GAAP measures to manage and
assess the profitability of our business going forward and does not consider stock-based
compensation expense and related taxes, or restructuring charges in managing our operations.
Specifically, management does not consider these expenses/benefits when developing and monitoring
our budgets and spending. The economic substance behind our decision to exclude stock-based
compensation relates to these charges being non-cash in nature. We exclude restructuring charges,
as they are one-time events. As a result, we use calculations of non-GAAP operating income, net
income, net income per share and gross margin, which exclude these expenses when evaluating our
ongoing operations and allocating resources within the organization.
As a result, our management believes it is useful for itself and investors to review both GAAP
information that includes such charges and non-GAAP financial measures that exclude these charges
because management believes such information enables readers of these financial results to have a
better understanding of the overall performance of our ongoing business operations in the periods
presented.
Whenever we use a non-GAAP financial measure, we provide a reconciliation of the non-GAAP financial
measure to the most closely applicable GAAP financial measure. Investors are encouraged to review
the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measure.
Conference Call Details for October 19, 2010
BigBand Networks will host a corresponding conference call and live webcast at 2:00 p.m. Pacific
Time today. To access the conference call, dial +1-877-941-8418 for the U.S. or Canada and
+1-480-629-9809 for international callers. The webcast will be available live on the Investor
Relations section of the Companys corporate website, and via replay beginning approximately two
hours after the completion of the call until the Companys announcement of its financial results
for the next quarter. An audio replay of the call will also be available to investors beginning at
approximately 4:00 p.m. Pacific Time on October 19, 2010 until 11:59 p.m. Pacific Time on October
26, 2010, by dialing +1-800-406-7325 or +1-303-590-3030 for callers outside the U.S. and Canada,
and entering passcode 4373838#.
Cautionary Statement
The statements in this release regarding our continued investments in our product portfolio, the
benefits from major milestones including our recently-announced next-generation QAM, our focus on bringing new products to
market, expanding our geographic reach, improving our financial position going forward, and our
GAAP and non-GAAP business outlook, as applicable, with respect to the quarter ending December 31,
2010 (including revenues, gross margins, operating expenses and loss per share) are forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, as amended. These statements involve risks and uncertainties that could cause our
actual results to differ materially, including, but not limited to: changes in demand for video
services, the market acceptance of our new and existing products; our ability to develop our new
products on a timely basis; the financial strengths of our current and potential customers; the
fluctuations in our gross margins; the concentration of our customer base; competitive developments
including pricing pressures; the timing of recognition of a significant portion of our net revenues
given the complex systems integration involved; our ability to manage operating expenses
effectively; the level of orders that are received and can be shipped in a given quarter; and the
general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to BigBands Report on Form
10-Q for the three months ended June 30, 2010. You can obtain copies of our SEC filings on the
SECs Web site (http://www.sec.gov).
Stockholders of BigBand Networks are cautioned not to place undue reliance on our forward-looking
statements, which speak only as of the date such statements are made. BigBand Networks does not
undertake any obligation to publicly update any forward-looking statements to reflect events,
circumstances or new information after this October 19, 2010 press release, or to reflect the
occurrence of unanticipated events.
About BigBand Networks
BigBand Networks, Inc. (NASDAQ: BBND) provides broadband service providers with innovative digital
video networking solutions designed to make it easier to move, manage and monetize video. These
solutions are based on BigBands video-networking platforms that are built to enable efficient and
reliable delivery across a wide range of services, including digital TV, high definition TV,
advanced advertising, video-on-demand and interactive TV. BigBand Networks has done business with
more than 200 customers including seven of the ten largest service providers in North America
and leading cable and telco service providers in North America, Asia and Europe. BigBand Networks
is based in Redwood City, Calif., with offices worldwide. For additional information about the
company, please call +1.650.995.5000, email info@bigbandnet.com or visit www.bigbandnet.com.
BigBand Networks brand and product names are service marks, trademarks or registered trademarks of
BigBand Networks, Inc. in the United States and other countries. All other marks are the property
of their respective owners.
###
BigBand Networks, Inc.
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
As of September 30, | As of December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 11,108 | $ | 24,894 | ||||
Marketable securities |
141,146 | 147,014 | ||||||
Total cash, cash equivalents and marketable securities |
152,254 | 171,908 | ||||||
Accounts receivable, net |
5,709 | 18,495 | ||||||
Inventories, net |
11,879 | 4,933 | ||||||
Prepaid expenses and other current assets |
3,845 | 6,177 | ||||||
Total current assets |
173,687 | 201,513 | ||||||
Property and equipment, net |
9,165 | 11,417 | ||||||
Goodwill |
1,656 | 1,656 | ||||||
Other non-current assets |
7,399 | 9,002 | ||||||
Total assets |
$ | 191,907 | $ | 223,588 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 8,668 | $ | 9,483 | ||||
Accrued compensation and related benefits |
5,234 | 5,023 | ||||||
Current portion of deferred revenues, net |
21,031 | 32,428 | ||||||
Current portion of other liabilities |
4,236 | 7,083 | ||||||
Total current liabilities |
39,169 | 54,017 | ||||||
Deferred revenues, net, less current portion |
9,251 | 12,438 | ||||||
Other liabilities, less current portion |
1,819 | 2,642 | ||||||
Accrued long-term Israeli severance pay |
4,691 | 4,215 | ||||||
Stockholders equity: |
||||||||
Common stock |
69 | 67 | ||||||
Additional paid-in-capital |
295,912 | 283,704 | ||||||
Accumulated other comprehensive income |
279 | 124 | ||||||
Accumulated deficit |
(159,283 | ) | (133,619 | ) | ||||
Total stockholders equity |
136,977 | 150,276 | ||||||
Total liabilities and stockholders equity |
$ | 191,907 | $ | 223,588 | ||||
BigBand Networks, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net revenues: |
||||||||||||||||
Products |
$ | 16,261 | $ | 12,647 | $ | 57,747 | $ | 68,795 | ||||||||
Services |
10,490 | 9,555 | 27,632 | 36,321 | ||||||||||||
Total net revenues |
26,751 | 22,202 | 85,379 | 105,116 | ||||||||||||
Cost of net revenues: |
||||||||||||||||
Products |
10,208 | 8,211 | 33,534 | 34,193 | ||||||||||||
Services |
2,872 | 2,885 | 9,181 | 9,169 | ||||||||||||
Total cost of net revenues |
13,080 | 11,096 | 42,715 | 43,362 | ||||||||||||
Gross profit |
13,671 | 11,106 | 42,664 | 61,754 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
12,432 | 11,698 | 39,034 | 34,308 | ||||||||||||
Sales and marketing |
4,483 | 6,009 | 16,531 | 18,313 | ||||||||||||
General and administrative |
4,024 | 4,612 | 12,560 | 14,109 | ||||||||||||
Restructuring (credits) charges |
(139 | ) | | 900 | 1,356 | |||||||||||
Class action litigation charges |
| | | 477 | ||||||||||||
Total operating expenses |
20,800 | 22,319 | 69,025 | 68,563 | ||||||||||||
Operating loss |
(7,129 | ) | (11,213 | ) | (26,361 | ) | (6,809 | ) | ||||||||
Interest income |
225 | 544 | 1,077 | 2,137 | ||||||||||||
Other (expense) income, net |
(134 | ) | 31 | (317 | ) | (62 | ) | |||||||||
Loss before provision for income taxes |
(7,038 | ) | (10,638 | ) | (25,601 | ) | (4,734 | ) | ||||||||
Provision for income taxes |
216 | 220 | 63 | 767 | ||||||||||||
Net loss |
$ | (7,254 | ) | $ | (10,858 | ) | $ | (25,664 | ) | $ | (5,501 | ) | ||||
Basic net loss per common share |
$ | (0.11 | ) | $ | (0.16 | ) | $ | (0.38 | ) | $ | (0.08 | ) | ||||
Diluted net loss per common share |
$ | (0.11 | ) | $ | (0.16 | ) | $ | (0.38 | ) | $ | (0.08 | ) | ||||
Shares used in GAAP basic net loss per common share |
68,853 | 66,368 | 68,067 | 65,666 | ||||||||||||
Shares used in GAAP diluted net loss per common share |
68,853 | 66,368 | 68,067 | 65,666 | ||||||||||||
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
Three Months Ended September 30, 2010 | ||||||||||||||||
Stock-based | ||||||||||||||||
GAAP | Compensation | Restructuring | Non-GAAP | |||||||||||||
Results | and Income Taxes | credits | Results | |||||||||||||
Net revenues: |
||||||||||||||||
Products |
$ | 16,261 | $ | | $ | | $ | 16,261 | ||||||||
Services |
10,490 | | | 10,490 | ||||||||||||
Total net revenues |
26,751 | | | 26,751 | ||||||||||||
Cost of net revenues: |
||||||||||||||||
Products |
10,208 | (331 | ) | | 9,877 | |||||||||||
Services |
2,872 | (215 | ) | | 2,657 | |||||||||||
Total cost of net revenues |
13,080 | (546 | ) | | 12,534 | |||||||||||
Gross profit |
13,671 | 546 | | 14,217 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
12,432 | (1,257 | ) | | 11,175 | |||||||||||
Sales and marketing |
4,483 | (424 | ) | | 4,059 | |||||||||||
General and administrative |
4,024 | (1,063 | ) | | 2,961 | |||||||||||
Restructuring credits |
(139 | ) | | 139 | | |||||||||||
Total operating expenses |
20,800 | (2,744 | ) | 139 | 18,195 | |||||||||||
Operating loss |
(7,129 | ) | 3,290 | (139 | ) | (3,978 | ) | |||||||||
Interest income |
225 | | | 225 | ||||||||||||
Other expense |
(134 | ) | | | (134 | ) | ||||||||||
Loss before provision for income taxes |
(7,038 | ) | 3,290 | (139 | ) | (3,887 | ) | |||||||||
Provision for income taxes |
216 | (84 | ) | | 132 | |||||||||||
Net loss |
$ | (7,254 | ) | $ | 3,374 | $ | (139 | ) | $ | (4,019 | ) | |||||
Basic net loss per common share |
$ | (0.11 | ) | $ | (0.06 | ) | ||||||||||
Diluted net loss per common share |
$ | (0.11 | ) | $ | (0.06 | ) | ||||||||||
Shares used in basic net loss per common share |
68,853 | 68,853 | ||||||||||||||
Shares used in diluted net loss per common
share |
68,853 | 68,853 | ||||||||||||||
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
Nine Months Ended September 30, 2010 | ||||||||||||||||
GAAP | Stock-based | Restructuring | Non-GAAP | |||||||||||||
Results | Compensation | charges | Results | |||||||||||||
Net revenues: |
||||||||||||||||
Products |
$ | 57,747 | $ | | $ | | $ | 57,747 | ||||||||
Services |
27,632 | | | 27,632 | ||||||||||||
Total net revenues |
85,379 | | | 85,379 | ||||||||||||
Cost of net revenues: |
||||||||||||||||
Products |
33,534 | (1,015 | ) | | 32,519 | |||||||||||
Services |
9,181 | (707 | ) | | 8,474 | |||||||||||
Total cost of net revenues |
42,715 | (1,722 | ) | | 40,993 | |||||||||||
Gross profit |
42,664 | 1,722 | | 44,386 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
39,034 | (3,944 | ) | | 35,090 | |||||||||||
Sales and marketing |
16,531 | (1,735 | ) | | 14,796 | |||||||||||
General and administrative |
12,560 | (3,272 | ) | | 9,288 | |||||||||||
Restructuring charges |
900 | | (900 | ) | | |||||||||||
Total operating expenses |
69,025 | (8,951 | ) | (900 | ) | 59,174 | ||||||||||
Operating loss |
(26,361 | ) | 10,673 | 900 | (14,788 | ) | ||||||||||
Interest income |
1,077 | | | 1,077 | ||||||||||||
Other expense |
(317 | ) | | | (317 | ) | ||||||||||
Loss before provision for income taxes |
(25,601 | ) | 10,673 | 900 | (14,028 | ) | ||||||||||
Provision for income taxes |
63 | 41 | | 104 | ||||||||||||
Net loss |
$ | (25,664 | ) | $ | 10,632 | $ | 900 | $ | (14,132 | ) | ||||||
Basic net loss per common share |
$ | (0.38 | ) | $ | (0.21 | ) | ||||||||||
Diluted net loss per common share |
$ | (0.38 | ) | $ | (0.21 | ) | ||||||||||
Shares used in basic net loss per common share |
68,067 | 68,067 | ||||||||||||||
Shares used in diluted net loss per common share |
68,067 | 68,067 | ||||||||||||||
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts and percentages, Unaudited)
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts and percentages, Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
GAAP and Non-GAAP net revenues as reported |
$ | 26,751 | $ | 22,202 | $ | 85,379 | $ | 105,116 | ||||||||
GAAP cost of net revenues as reported |
$ | 13,080 | $ | 11,096 | $ | 42,715 | $ | 43,362 | ||||||||
Inventory recovery relating to CMTS platform |
| | | 73 | ||||||||||||
Stock-based compensation expense |
(546 | ) | (562 | ) | (1,722 | ) | (1,521 | ) | ||||||||
Non-GAAP cost of net revenues |
$ | 12,534 | $ | 10,534 | $ | 40,993 | $ | 41,914 | ||||||||
GAAP gross profit as reported |
$ | 13,671 | $ | 11,106 | $ | 42,664 | $ | 61,754 | ||||||||
Inventory recovery relating to CMTS platform |
| | | (73 | ) | |||||||||||
Stock-based compensation expense |
546 | 562 | 1,722 | 1,521 | ||||||||||||
Non-GAAP gross profit |
$ | 14,217 | $ | 11,668 | $ | 44,386 | $ | 63,202 | ||||||||
As a percentage of net revenues: |
||||||||||||||||
GAAP gross profit as reported |
51.1 | % | 50.0 | % | 50.0 | % | 58.7 | % | ||||||||
Non-GAAP gross profit |
53.1 | % | 52.6 | % | 52.0 | % | 60.1 | % | ||||||||
GAAP operating loss as reported |
$ | (7,129 | ) | $ | (11,213 | ) | $ | (26,361 | ) | $ | (6,809 | ) | ||||
Inventory recovery relating to CMTS platform |
| | | (73 | ) | |||||||||||
Stock-based compensation expense: |
||||||||||||||||
- Cost of net revenues |
546 | 562 | 1,722 | 1,521 | ||||||||||||
- Research and development |
1,257 | 1,346 | 3,944 | 3,566 | ||||||||||||
- Sales and marketing |
424 | 687 | 1,735 | 1,751 | ||||||||||||
- General and administrative |
1,063 | 1,210 | 3,272 | 3,460 | ||||||||||||
Restructuring (credits) charges |
(139 | ) | | 900 | 1,356 | |||||||||||
Class action litigation charges |
| | | 477 | ||||||||||||
Non-GAAP operating (loss) income |
$ | (3,978 | ) | $ | (7,408 | ) | $ | (14,788 | ) | $ | 5,249 | |||||
GAAP net loss as reported |
$ | (7,254 | ) | $ | (10,858 | ) | $ | (25,664 | ) | $ | (5,501 | ) | ||||
Inventory recovery relating to CMTS platform |
| | | (73 | ) | |||||||||||
Stock-based compensation expense |
3,290 | 3,805 | 10,673 | 10,298 | ||||||||||||
Restructuring (credits) charges |
(139 | ) | | 900 | 1,356 | |||||||||||
Class action litigation charges |
| | | 477 | ||||||||||||
Tax benefits (adjustments) |
84 | 1,114 | (41 | ) | (352 | ) | ||||||||||
Non-GAAP net (loss) income |
$ | (4,019 | ) | $ | (5,939 | ) | $ | (14,132 | ) | $ | 6,205 | |||||
Basic Non-GAAP net (loss) income per common share |
$ | (0.06 | ) | $ | (0.09 | ) | $ | (0.21 | ) | $ | 0.09 | |||||
Diluted Non-GAAP net (loss) income per common share |
$ | (0.06 | ) | $ | (0.09 | ) | $ | (0.21 | ) | $ | 0.09 | |||||
Shares used in Basic Non-GAAP net (loss) income per common share |
68,853 | 66,368 | 68,067 | 65,666 | ||||||||||||
Shares used in Diluted Non-GAAP net (loss) income per common share |
68,853 | 66,368 | 68,067 | 68,619 | ||||||||||||