Attached files
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| 8-K - BIGBAND NETWORKS, INC 8-K 10-24-2011 - BigBand Networks, Inc. | form8k.htm |
Exhibit 99.1
BigBand Announces Third Quarter 2011 Financial Results
REDWOOD CITY, Calif., October 24, 2011—BigBand Networks, Inc. (NASDAQ: BBND), a leader in digital video networking, today reported financial results for the third quarter ended September 30, 2011.
For the third quarter, total revenues were $22.5 million as compared to $26.8 million reported in the third quarter of 2010. GAAP net loss for the third quarter of 2011 was $8.3 million, or ($0.12) per share, compared to GAAP net loss of $7.3 million, or ($0.11) per share, reported in the third quarter of 2010.
On a non-GAAP basis, the Company reported a net loss of $5.9 million, or ($0.08) per share, in the third quarter of 2011, which compares to a non-GAAP net loss of $4.0 million, or ($0.06) per share, reported in the third quarter of 2010. These non-GAAP results exclude $2.4 million of stock compensation expense and related income taxes as compared to $3.2 million of stock compensation expense, restructuring credits and related income taxes in the third quarter of 2010.
The GAAP to non-GAAP reconciling items, for the quarters ended September 30, 2011 and 2010 can be found in “The Reconciliations of GAAP to Non-GAAP Financial Measures” attached to this press release.
The third quarter of 2011 GAAP and non-GAAP results include $1.6 million in charges related to inventory reserve taken against legacy products, as the Company transitions to its newer MSP products. In addition, these GAAP and Non-GAAP results include approximately $0.5 million in general and administrative expenses related to the acquisition of the Company by ARRIS.
The Company closed the third quarter of 2011 with $119.8 million in cash, cash equivalents and marketable securities.
On October 11, 2011, BigBand announced that it has entered into a definitive agreement to be acquired by ARRIS for a purchase price of $2.24 per share in cash. The acquisition will be conducted by means of a tender offer for all of the outstanding shares of BigBand. The tender offer was filed with the SEC on October 21, 2011.
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 or restructuring charges and related taxes 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 is that this charge is non-cash in nature. We exclude restructuring charges as they are one-time events. As a result, we use calculations of non-GAAP operating loss, net loss, net loss 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 have access to 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 measures.
For a detailed discussion of these and other risk factors, please refer to BigBand’s Quarterly Report on Form 10-Q for the three months ended June 30, 2011 and other reports filed with the SEC. You can obtain copies of the reports on the SEC's Web site (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 24, 2011 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 BigBand's 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, IPTV, video-on-demand and interactive TV. BigBand Networks has done business with more than 200 customers in North America, Asia and Europe - including eight of the ten largest cable and telco service providers in North America. 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 http://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.
Investor Relations:
Erica Abrams
+1.415.217.5864
erica@blueshirtgroup.com
Matthew Hunt
+1.415.489.2194
matt@blueshirtgroup.com
BigBand Networks, Inc.
Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
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As of September 30,
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As of December 31,
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2011
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2010
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ASSETS
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Current assets:
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||||||||
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Cash and cash equivalents
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$ | 16,797 | $ | 21,537 | ||||
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Marketable securities
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103,015 | 122,012 | ||||||
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Total cash, cash equivalents and marketable securities
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119,812 | 143,549 | ||||||
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Accounts receivable, net
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10,211 | 5,001 | ||||||
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Inventories, net
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8,247 | 11,117 | ||||||
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Prepaid expenses and other current assets
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3,686 | 4,190 | ||||||
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Total current assets
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141,956 | 163,857 | ||||||
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Property and equipment, net
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6,454 | 8,088 | ||||||
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Goodwill
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1,656 | 1,656 | ||||||
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Other non-current assets
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5,963 | 7,170 | ||||||
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Total assets
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$ | 156,029 | $ | 180,771 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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||||||||
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Accounts payable
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$ | 5,634 | $ | 4,656 | ||||
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Accrued compensation and related benefits
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6,110 | 5,178 | ||||||
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Current portion of deferred revenues, net
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15,941 | 18,143 | ||||||
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Current portion of other liabilities
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3,822 | 4,266 | ||||||
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Total current liabilities
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31,507 | 32,243 | ||||||
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Deferred revenues, net, less current portion
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6,787 | 8,327 | ||||||
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Other liabilities, less current portion
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1,402 | 1,692 | ||||||
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Accrued long-term Israeli severance pay
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4,163 | 4,376 | ||||||
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Stockholders’ equity:
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||||||||
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Common stock
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72 | 70 | ||||||
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Additional paid-in-capital
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307,044 | 299,003 | ||||||
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Accumulated other comprehensive (loss) income
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(506 | ) | 253 | |||||
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Accumulated deficit
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(194,440 | ) | (165,193 | ) | ||||
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Total stockholders’ equity
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112,170 | 134,133 | ||||||
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Total liabilities and stockholders’ equity
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$ | 156,029 | $ | 180,771 | ||||
BigBand Networks, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2011
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2010
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2011
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2010
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Net revenues:
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Products
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$ | 13,921 | $ | 16,261 | $ | 33,708 | $ | 57,747 | ||||||||
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Services
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8,575 | 10,490 | 26,931 | 27,632 | ||||||||||||
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Total net revenues
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22,496 | 26,751 | 60,639 | 85,379 | ||||||||||||
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Cost of net revenues:
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Products
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8,931 | 10,208 | 20,878 | 33,534 | ||||||||||||
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Services
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2,796 | 2,872 | 8,631 | 9,181 | ||||||||||||
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Total cost of net revenues
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11,727 | 13,080 | 29,509 | 42,715 | ||||||||||||
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Gross profit
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10,769 | 13,671 | 31,130 | 42,664 | ||||||||||||
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Operating expenses:
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Research and development
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10,020 | 12,432 | 32,080 | 39,034 | ||||||||||||
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Sales and marketing
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4,689 | 4,483 | 14,774 | 16,531 | ||||||||||||
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General and administrative
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4,335 | 4,024 | 11,516 | 12,560 | ||||||||||||
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Restructuring (credits) charges
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- | (139 | ) | 2,007 | 900 | |||||||||||
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Total operating expenses
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19,044 | 20,800 | 60,377 | 69,025 | ||||||||||||
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Operating loss
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(8,275 | ) | (7,129 | ) | (29,247 | ) | (26,361 | ) | ||||||||
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Interest income
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191 | 225 | 615 | 1,077 | ||||||||||||
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Other income (expense), net
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25 | (134 | ) | 17 | (317 | ) | ||||||||||
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Loss before provision for income taxes
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(8,059 | ) | (7,038 | ) | (28,615 | ) | (25,601 | ) | ||||||||
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Provision for income taxes
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192 | 216 | 632 | 63 | ||||||||||||
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Net loss
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$ | (8,251 | ) | $ | (7,254 | ) | $ | (29,247 | ) | $ | (25,664 | ) | ||||
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Basic and diluted net loss per common share
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$ | (0.12 | ) | $ | (0.11 | ) | $ | (0.42 | ) | $ | (0.38 | ) | ||||
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Shares used in basic and diluted net loss per common share
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71,203 | 68,853 | 70,448 | 68,067 | ||||||||||||
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
|
Three Months Ended September 30, 2011
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GAAP Results
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Stock-based Compensation and Income Taxes
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Non-GAAP Results
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||||||||||
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Net revenues:
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||||||||||||
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Products
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$ | 13,921 | $ | - | $ | 13,921 | ||||||
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Services
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8,575 | - | 8,575 | |||||||||
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Total net revenues
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22,496 | - | 22,496 | |||||||||
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Cost of net revenues:
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||||||||||||
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Products
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8,931 | (176 | ) | 8,755 | ||||||||
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Services
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2,796 | (187 | ) | 2,609 | ||||||||
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Total cost of net revenues
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11,727 | (363 | ) | 11,364 | ||||||||
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Gross profit
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10,769 | 363 | 11,132 | |||||||||
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Operating expenses:
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Research and development
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10,020 | (875 | ) | 9,145 | ||||||||
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Sales and marketing
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4,689 | (388 | ) | 4,301 | ||||||||
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General and administrative
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4,335 | (641 | ) | 3,694 | ||||||||
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Total operating expenses
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19,044 | (1,904 | ) | 17,140 | ||||||||
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Operating loss
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(8,275 | ) | 2,267 | (6,008 | ) | |||||||
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Interest income
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191 | - | 191 | |||||||||
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Other income
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25 | - | 25 | |||||||||
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Loss before provision for income taxes
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(8,059 | ) | 2,267 | (5,792 | ) | |||||||
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Provision for income taxes
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192 | (85 | ) | 107 | ||||||||
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Net loss
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$ | (8,251 | ) | $ | 2,352 | $ | (5,899 | ) | ||||
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Basic and diluted net loss per common share
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$ | (0.12 | ) | $ | (0.08 | ) | ||||||
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Shares used in basic and diluted net loss per common share
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71,203 | 71,203 | ||||||||||
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts, Unaudited)
|
Nine Months Ended September 30, 2011
|
||||||||||||||||
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GAAP Results
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Stock-based Compensation and Income Taxes
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Restructuring charges
|
Non-GAAP Results
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|||||||||||||
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Net revenues:
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||||||||||||||||
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Products
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$ | 33,708 | $ | - | $ | - | $ | 33,708 | ||||||||
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Services
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26,931 | - | - | 26,931 | ||||||||||||
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Total net revenues
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60,639 | - | - | 60,639 | ||||||||||||
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Cost of net revenues:
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||||||||||||||||
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Products
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20,878 | (638 | ) | - | 20,240 | |||||||||||
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Services
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8,631 | (626 | ) | - | 8,005 | |||||||||||
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Total cost of net revenues
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29,509 | (1,264 | ) | - | 28,245 | |||||||||||
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Gross profit
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31,130 | 1,264 | - | 32,394 | ||||||||||||
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Operating expenses:
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||||||||||||||||
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Research and development
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32,080 | (3,080 | ) | - | 29,000 | |||||||||||
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Sales and marketing
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14,774 | (1,102 | ) | - | 13,672 | |||||||||||
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General and administrative
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11,516 | (2,048 | ) | - | 9,468 | |||||||||||
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Restructuring charges
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2,007 | - | (2,007 | ) | - | |||||||||||
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Total operating expenses
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60,377 | (6,230 | ) | (2,007 | ) | 52,140 | ||||||||||
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Operating loss
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(29,247 | ) | 7,494 | 2,007 | (19,746 | ) | ||||||||||
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Interest income
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615 | - | - | 615 | ||||||||||||
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Other income
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17 | - | - | 17 | ||||||||||||
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Loss before provision for income taxes
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(28,615 | ) | 7,494 | 2,007 | (19,114 | ) | ||||||||||
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Provision for (benefit from) income taxes
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632 | (229 | ) | - | 403 | |||||||||||
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Net loss
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$ | (29,247 | ) | $ | 7,723 | $ | 2,007 | $ | (19,517 | ) | ||||||
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Basic and diluted net loss per common share
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$ | (0.42 | ) | $ | (0.28 | ) | ||||||||||
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Shares used in basic and diluted net loss per common share
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70,448 | 70,448 | ||||||||||||||
BigBand Networks, Inc.
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,
|
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2011
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2010
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2011
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2010
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GAAP and Non-GAAP net revenues as reported
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$ | 22,496 | $ | 26,751 | $ | 60,639 | $ | 85,379 | ||||||||
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GAAP cost of net revenues as reported
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$ | 11,727 | $ | 13,080 | $ | 29,509 | $ | 42,715 | ||||||||
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Stock-based compensation expense
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(363 | ) | (546 | ) | (1,264 | ) | (1,722 | ) | ||||||||
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Non-GAAP cost of net revenues
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$ | 11,364 | $ | 12,534 | $ | 28,245 | $ | 40,993 | ||||||||
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GAAP gross profit as reported
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$ | 10,769 | $ | 13,671 | $ | 31,130 | $ | 42,664 | ||||||||
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Stock-based compensation expense
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363 | 546 | 1,264 | 1,722 | ||||||||||||
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Non-GAAP gross profit
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$ | 11,132 | $ | 14,217 | $ | 32,394 | $ | 44,386 | ||||||||
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As a percentage of net revenues:
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||||||||||||||||
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GAAP gross profit as reported
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47.9 | % | 51.1 | % | 51.3 | % | 50.0 | % | ||||||||
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Non-GAAP gross profit
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49.5 | % | 53.1 | % | 53.4 | % | 52.0 | % | ||||||||
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GAAP operating loss as reported
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$ | (8,275 | ) | $ | (7,129 | ) | $ | (29,247 | ) | $ | (26,361 | ) | ||||
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Stock-based compensation expense:
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||||||||||||||||
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- Cost of net revenues
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363 | 546 | 1,264 | 1,722 | ||||||||||||
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- Research and development
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875 | 1,257 | 3,080 | 3,944 | ||||||||||||
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- Sales and marketing
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388 | 424 | 1,102 | 1,735 | ||||||||||||
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- General and administrative
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641 | 1,063 | 2,048 | 3,272 | ||||||||||||
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Restructuring (credits) charges
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- | (139 | ) | 2,007 | 900 | |||||||||||
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Non-GAAP operating loss
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$ | (6,008 | ) | $ | (3,978 | ) | $ | (19,746 | ) | $ | (14,788 | ) | ||||
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GAAP net loss as reported
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$ | (8,251 | ) | $ | (7,254 | ) | $ | (29,247 | ) | $ | (25,664 | ) | ||||
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Stock-based compensation expense
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2,267 | 3,290 | 7,494 | 10,673 | ||||||||||||
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Restructuring (credits) charges
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- | (139 | ) | 2,007 | 900 | |||||||||||
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Tax benefits (provision)
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85 | 84 | 229 | (41 | ) | |||||||||||
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Non-GAAP net loss
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$ | (5,899 | ) | $ | (4,019 | ) | $ | (19,517 | ) | $ | (14,132 | ) | ||||
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Basic and diluted Non-GAAP net loss per common share
|
$ | (0.08 | ) | $ | (0.06 | ) | $ | (0.28 | ) | $ | (0.21 | ) | ||||
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Shares used in basic and diluted Non-GAAP net loss per common share
|
71,203 | 68,853 | 70,448 | 68,067 | ||||||||||||