BigBand Networks, Inc., (NASDAQ: BBND) today reported financial
results for the fourth quarter and fiscal year ended December 31,
2009.
For the fourth quarter of 2009, total revenues were $34.4
million. This compares to revenues of $54.1 million reported in the
fourth quarter of 2008. GAAP net loss for the fourth quarter of
2009 was $1.2 million, or ($0.02) per share, as compared to GAAP
net income of $7.3 million, or $0.11 per diluted share, reported in
the fourth quarter of 2008.
On a non-GAAP basis, the Company reported net income of $3.1
million, or $0.04 per diluted share, in the fourth quarter of 2009,
which compares to non-GAAP net income of $10.4 million, or $0.15
per diluted share, reported in the fourth quarter of 2008. Fourth
quarter 2009 non-GAAP results exclude $3.9 million in stock-based
compensation expense and include $0.4 million of incremental tax
benefit.
For fiscal year 2009, total revenues were $139.5 million, as
compared to $185.3 million reported in 2008. GAAP net loss was $6.7
million, or ($0.10) per share, compared to GAAP net income of $9.8
million, or $0.15 per share, reported in fiscal year 2008.
On a non-GAAP basis, the Company reported net income of $9.3
million, or $0.13 per diluted share, for fiscal year 2009, which
compares to non-GAAP net income of $22.8 million, or $0.34 per
diluted share, reported for 2008. The GAAP to non-GAAP reconciling
items, for the three months and years ended December 31, 2009 and
2008 can be found in “The Reconciliations of GAAP to Non-GAAP
Financial Measures” attached to this press release.
BigBand generated $11.3 million in cash from operating
activities in the fourth quarter ended December 31, 2009 and closed
the year with $171.9 million in cash, cash equivalents and
marketable securities.
"Our fourth quarter performance marks the positive conclusion to
2009, despite the challenging macroeconomic environment," commented
Amir Bassan-Eskenazi, President and CEO of BigBand Networks.
"During the year, we continued to win strategic footprint and align
with our customers to deliver solutions that tie to the trends of
HD, TV Everywhere and, ultimately, 3D-TV. In addition, we were
successful at managing expenses, preserving cash and maintaining a
strong balance sheet.
"In fiscal year 2010, we expect revenues to grow at
approximately 10% despite the cautious capital spending indicated
by our customers. Video is at the core of our customers’ business
strategy, and we believe a larger portion of capital budgets will
be allocated to digital video networking over time.”
First Quarter 2010 Business Outlook
For the first quarter of 2010, management provides the following
outlook:
- Net revenues are expected to be
in the range of $33.0 million to $35.0 million
- GAAP gross margins are expected
to be in the range of 53% to 55%
- Non-GAAP gross margins are
expected to be in the range of 54% to 56%
- GAAP operating expenses are
expected to be in the range of $24.5 million to $25.5 million.
- Non-GAAP operating expenses are
expected to be in the range of $21.0 million to $22.0 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 ($0.03) to ($0.05).
The following table shows our non-GAAP anticipated results for
the quarter ending March 31, 2010 reconciled to our GAAP
anticipated results. Our non-GAAP anticipated results exclude
stock-based compensation.
Estimated loss per Share Low
High GAAP net loss ($0.09) ($0.11) Stock-based
compensation 0.06 0.06 Non-GAAP net loss ($0.03) ($0.05)
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 amortization of
intangible assets which are non-cash charges, as well as charges
related to the settlement of the federal class action lawsuit,
restructuring charges in managing our operations, any benefit from
the sale of our CMTS product inventory that was previously reserved
for in prior periods and related taxes. 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 and amortization
of intangible assets relates to these charges being non-cash in
nature. We exclude restructuring charges and charges related to the
settlement of the federal class action lawsuit 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 February 4, 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 +1-877-941-2069 for the U.S. or Canada and
+1-480-629-9713 for international callers. The webcast will be
available live on the Investor Relations section of the Company’s
corporate website at www.bigbandnet.com, and via replay beginning
approximately two hours after the completion of the call until the
Company’s 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
February 4, 2010 until 11:59 p.m. Pacific Time on February 11,
2010, by dialing +1-800-406-7325 or +1-303-590-3030 for callers
outside the U.S. and Canada, and entering passcode 4199719#.
Cautionary Statement
The statements in this release regarding how the Company’s
products will tie to TV Everywhere and 3D-TV, revenue growth of 10%
in 2010, cautious capital spending by our customers in 2010 and our
GAAP and non-GAAP business outlook, as applicable, with respect to
the quarter ending March 31, 2010 (including revenues, gross
margins, operating expenses and earnings per share) are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause
our actual results to differ materially, including, but not limited
to: unexpected fluctuations in our business due to disruption in
the global economy, global credit issues, volatility in equity
markets, changes in demand for video services, the market
acceptance of our products; 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 BigBand’s Report on Form 10-K for fiscal year 2008
and most recent Report on Form 10-Q for the quarter ended September
30, 2009. 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 February 4, 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 network 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, video-on-demand and interactive TV. BigBand Networks'
customers include more than 200 service providers -- including
seven of the ten largest service providers in the U.S. -- and
leading cable and telco service providers in North America, Asia,
Europe and Latin 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 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)
As of December 31, As of
December 31, 2009 2008 ASSETS Current
assets: Cash and cash equivalents $ 24,894 $ 50,981 Marketable
securities 147,014 123,654 Total cash,
cash equivalents and marketable securities 171,908 174,635 Accounts
receivable, net 18,495 26,361 Inventories, net 4,933 6,123 Prepaid
expenses and other current assets 6,177 3,716
Total current assets 201,513 210,835 Property and
equipment, net 11,417 15,358 Goodwill 1,656 1,656 Other non-current
assets 9,002 6,273 Total assets $
223,588 $ 234,122
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $
9,483 $ 8,350 Accrued compensation and related benefits 5,023
11,433 Current portion of deferred revenues, net 32,428 39,433
Current portion of other liabilities 7,083
9,221 Total current liabilities 54,017 68,437
Deferred revenues, net, less current portion 12,438 21,129 Other
liabilities, less current portion 2,642 2,392 Accrued long-term
Israeli severance pay 4,215 3,745 Stockholders’ equity:
Common stock 67 65 Additional paid-in capital 283,704 265,176
Accumulated other comprehensive income 124 58 Accumulated deficit
(133,619 ) (126,880 ) Total stockholders’ equity
150,276 138,419 Total liabilities and
stockholders’ equity $ 223,588 $ 234,122
BigBand
Networks, Inc. Condensed Consolidated Statements of Operations
(In thousands, except per share amounts, Unaudited)
Three Months Ended December 31, Year Ended
December 31, 2009 2008
2009 2008
Net revenues: Products $ 24,867 $ 44,229 $ 93,662 $ 148,417
Services 9,531 9,864 45,852
36,876 Total net revenues 34,398 54,093
139,514 185,293 Cost of net revenues: Products 11,768 16,748
45,961 60,207 Services 3,215 3,315
12,384 12,755 Total cost of net
revenues 14,983 20,063 58,345
72,962 Gross profit 19,415
34,030 81,169 112,331
Operating expenses: Research and development 12,123 13,613
46,431 54,043 Sales and marketing 5,888 7,012 24,201 28,935 General
and administrative 4,753 5,285 18,862 20,884 Restructuring
(credits) charges - (175 ) 1,356 2,055 Amortization of intangible
assets - 335 - 733 Gain on sale of intangible assets - (1,800 ) -
(1,800 ) Class action litigation charges -
1,504 477 1,504 Total operating
expenses 22,764 25,774 91,327
106,354 Operating (loss) income (3,349
) 8,256 (10,158 ) 5,977 Interest income 433 1,088 2,570 5,174 Other
(expense) income, net (156 ) (273 ) (218 )
1,029 (Loss) income before (benefit from) provision
for income taxes (3,072 ) 9,071 (7,806 ) 12,180 (Benefit from)
provision for income taxes* (1,834 ) 1,749
(1,067 ) 2,400 Net (loss) income $ (1,238 ) $
7,322 $ (6,739 ) $ 9,780 Basic net (loss)
income per common share $ (0.02 ) $ 0.11 $ (0.10 ) $ 0.15
Diluted net (loss) income per common share $ (0.02 ) $ 0.11
$ (0.10 ) $ 0.15 Shares used in GAAP basic net
(loss) income per common share 66,738 64,359
65,936 63,559 Shares used in
GAAP diluted net (loss) income per common share 66,738
67,412 65,936 67,264
*Benefit from income taxes for the
three months and year ended December 31, 2009 includes a $1.3
million beneficial enterprise exemption from Israeli taxes and a
$0.7 million benefit from U.S. net operating loss carry-backs as a
result of the Worker, Home Ownership, and Business Assistance Act
of 2009.
BigBand Networks, Inc. Reconciliation of GAAP to Non-GAAP
Financial Measures (In thousands, except per share amounts,
Unaudited)
Three Months Ended December 31,
2009 GAAP Results
Stock-based
Compensation
and Income Taxes
Non-GAAP Results
Net revenues: Products $ 24,867 $ - $
24,867 Services 9,531 - 9,531
Total net revenues 34,398 -
34,398 Cost of net revenues: Products 11,768
(329 ) 11,439 Services 3,215 (234 )
2,981 Total cost of net revenues 14,983
(563 ) 14,420 Gross profit 19,415
563 19,978 Operating expenses:
Research and development 12,123 (1,321 ) 10,802 Sales and marketing
5,888 (681 ) 5,207 General and administrative 4,753
(1,356 ) 3,397 Total operating expenses
22,764 (3,358 ) 19,406 Operating
(loss) income (3,349 ) 3,921 572 Interest income 433 - 433 Other
expense (156 ) - (156 ) (Loss) income
before benefit from income taxes (3,072 ) 3,921 849 Benefit from
income taxes (1,834 ) (377 ) (2,211 ) Net
(loss) income $ (1,238 ) $ 4,298 $ 3,060 Basic
net (loss) income per common share $ (0.02 ) $ 0.05 Diluted
net (loss) income per common share $ (0.02 ) $ 0.04
Shares used in basic net (loss) income per common share
66,738 66,738 Shares used in diluted net
(loss) income per common share 66,738 69,027
BigBand Networks, Inc. Reconciliation of GAAP to
Non-GAAP Financial Measures (In thousands, except per share
amounts, Unaudited)
Year
Ended December 31, 2009 GAAP Results Stock-based
Compensation
and Income Taxes
Realignment Expenses Class action litigation charges
Non-GAAP Results
Net revenues: Products $ 93,662 $ - $ - $ - $ 93,662 Services
45,852 - - -
45,852 Total net revenues 139,514
- - -
139,514 Cost of net revenues: Products 45,961 (1,207
) 73 - 44,827 Services 12,384 (877 ) -
- 11,507 Total cost of net
revenues 58,345 (2,084 ) 73
- 56,334 Gross profit 81,169
2,084 (73 ) -
83,180 Operating expenses: Research and development
46,431 (4,887 ) - - 41,544 Sales and marketing 24,201 (2,432 ) - -
21,769 General and administrative 18,862 (4,816 ) - - 14,046
Restructuring charges 1,356 - (1,356 ) - - Class action litigation
charges 477 - -
(477 ) - Total operating expenses 91,327
(12,135 ) (1,356 ) (477 ) 77,359
Operating (loss) income (10,158 ) 14,219 1,283 477
5,821 Interest income 2,570 - - - 2,570 Other expense (218 )
- - - (218 )
(Loss) income before benefit from income taxes (7,806 ) 14,219
1,283 477 8,173 Benefit from income taxes (1,067 )
(25 ) - - (1,092 ) Net (loss)
income $ (6,739 ) $ 14,244 $ 1,283 $ 477 $
9,265 Basic net (loss) income per common share $
(0.10 ) $ 0.14 Diluted net (loss) income per common share $
(0.10 ) $ 0.13 Shares used in basic net (loss) income
per common share 65,936 65,936 Shares
used in diluted net (loss) income per common share 65,936
68,727
BigBand Networks, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (In
thousands, except per share amounts and percentages, Unaudited)
Three Months Ended December 31, Year
Ended December 31, 2009 2008
2009 2008
GAAP and Non-GAAP net revenues as reported $ 34,398 $ 54,093
$ 139,514 $ 185,293 GAAP cost of net
revenues as reported $ 14,983 $ 20,063 $ 58,345 $ 72,962 Inventory
recovery relating to CMTS platform - 37 73 810 Stock-based
compensation expense (563 ) (454 ) (2,084 )
(1,733 ) Non-GAAP cost of net revenues $ 14,420 $
19,646 $ 56,334 $ 72,039 GAAP gross
profit as reported $ 19,415 $ 34,030 $ 81,169 $ 112,331 Inventory
recovery relating to CMTS platform - (37 ) (73 ) (810 ) Stock-based
compensation expense 563 454
2,084 1,733 Non-GAAP gross profit $ 19,978
$ 34,447 $ 83,180 $ 113,254 As a
percentage of net revenues: GAAP gross profit as reported
56.4 % 62.9 % 58.2 % 60.6 % Non-GAAP gross
profit 58.1 % 63.7 % 59.6 % 61.1 %
GAAP operating (loss) income as reported $ (3,349 ) $ 8,256
$ (10,158 ) $ 5,977 Inventory recovery relating to CMTS platform -
(37 ) (73 ) (810 ) Stock-based compensation expense: - Cost of net
revenues 563 454 2,084 1,733 - Research and development 1,321 1,022
4,887 3,901 - Sales and marketing 681 659 2,432 2,566 - General and
administrative 1,356 1,037 4,816 3,675 Restructuring (credits)
charges - (175 ) 1,356 2,055 Amortization of intangible assets -
335 - 733 Gain on sale of intangible assets - (1,800 ) - (1,800 )
Class action litigation charges - 1,504
477 1,504 Non-GAAP operating income $
572 $ 11,255 $ 5,821 $ 19,534
GAAP net (loss) income as reported $ (1,238 ) $ 7,322 $ (6,739 ) $
9,780 Inventory recovery relating to CMTS platform - (37 ) (73 )
(810 ) Stock-based compensation expense 3,921 3,172 14,219 11,875
Restructuring (credits) charges - (175 ) 1,356 2,055 Amortization
of intangible assets - 335 - 733 Gain on sale of intangible assets
- (1,800 ) - (1,800 ) Class action litigation charges - 1,504 477
1,504 Tax benefits (adjustments) 377 39
25 (570 ) Non-GAAP net income $ 3,060 $
10,360 $ 9,265 $ 22,767 Basic Non-GAAP
net income per common share $ 0.05 $ 0.16 $ 0.14
$ 0.36 Diluted Non-GAAP net income per common share $
0.04 $ 0.15 $ 0.13 $ 0.34 Shares
used in Basic Non-GAAP net income per common share 66,738
64,359 65,936 63,559
Shares used in Diluted Non-GAAP net income per common
share 69,027 67,412 68,727
67,264
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