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.
BigBand Networks, Inc. Condensed Consolidated Balance Sheets
(In thousands, Unaudited)
As of September 30,
As of December 31, 2011
2010 ASSETS Current assets: Cash and cash
equivalents $ 16,797 $ 21,537 Marketable securities 103,015
122,012 Total cash, cash equivalents and
marketable securities 119,812 143,549 Accounts receivable, net
10,211 5,001 Inventories, net 8,247 11,117 Prepaid expenses and
other current assets 3,686 4,190 Total
current assets 141,956 163,857 Property and equipment, net
6,454 8,088 Goodwill 1,656 1,656 Other non-current assets
5,963 7,170 Total assets $ 156,029 $
180,771
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities: Accounts payable $ 5,634 $ 4,656 Accrued
compensation and related benefits 6,110 5,178 Current portion of
deferred revenues, net 15,941 18,143 Current portion of other
liabilities 3,822 4,266 Total current
liabilities 31,507 32,243 Deferred revenues, net, less
current portion 6,787 8,327 Other liabilities, less current portion
1,402 1,692 Accrued long-term Israeli severance pay 4,163 4,376
Stockholders’ equity: Common stock 72 70 Additional
paid-in-capital 307,044 299,003 Accumulated other comprehensive
(loss) income (506 ) 253 Accumulated deficit (194,440 )
(165,193 ) Total stockholders’ equity 112,170
134,133 Total liabilities and stockholders’ equity $
156,029 $ 180,771
BigBand Networks, Inc.
Condensed Consolidated Statements of Operations (In thousands,
except per share amounts, Unaudited)
Three Months Ended September 30, Nine Months Ended
September 30, 2011 2010
2011 2010
Net revenues: Products $ 13,921 $ 16,261 $ 33,708 $ 57,747 Services
8,575 10,490 26,931
27,632 Total net revenues 22,496
26,751 60,639 85,379 Cost
of net revenues: Products 8,931 10,208 20,878 33,534 Services
2,796 2,872 8,631
9,181 Total cost of net revenues 11,727
13,080 29,509 42,715 Gross
profit 10,769 13,671 31,130
42,664 Operating expenses: Research and
development 10,020 12,432 32,080 39,034 Sales and marketing 4,689
4,483 14,774 16,531 General and administrative 4,335 4,024 11,516
12,560 Restructuring (credits) charges - (139
) 2,007 900 Total operating expenses
19,044 20,800 60,377
69,025 Operating loss (8,275 ) (7,129 )
(29,247 ) (26,361 ) Interest income 191 225 615 1,077 Other income
(expense), net 25 (134 ) 17
(317 ) Loss before provision for income taxes (8,059 )
(7,038 ) (28,615 ) (25,601 ) Provision for income taxes 192
216 632 63 Net
loss $ (8,251 ) $ (7,254 ) $ (29,247 ) $ (25,664 ) Basic and
diluted net loss per common share $ (0.12 ) $ (0.11 ) $ (0.42 ) $
(0.38 ) Shares used in basic and diluted net loss per common
share 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 GAAP
Results
Stock-basedCompensationand Income Taxes
Non-GAAP Results
Net revenues: Products $ 13,921 $ - $ 13,921 Services
8,575 - 8,575 Total net
revenues 22,496 - 22,496
Cost of net revenues: Products 8,931 (176 ) 8,755 Services
2,796 (187 ) 2,609 Total cost of
net revenues 11,727 (363 ) 11,364
Gross profit 10,769 363
11,132 Operating expenses: Research and development
10,020 (875 ) 9,145 Sales and marketing 4,689 (388 ) 4,301 General
and administrative 4,335 (641 ) 3,694
Total operating expenses 19,044 (1,904
) 17,140 Operating loss (8,275 ) 2,267 (6,008
) Interest income 191 - 191 Other income 25 -
25 Loss before provision for income taxes
(8,059 ) 2,267 (5,792 ) Provision for income taxes 192
(85 ) 107 Net loss $ (8,251 ) $ 2,352
$ (5,899 ) Basic and diluted net loss per common
share $ (0.12 ) $ (0.08 ) Shares used in basic and diluted
net loss per common share 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 GAAP Results
Stock-basedCompensationand Income Taxes
Restructuringcharges
Non-GAAPResults
Net revenues: Products $ 33,708 $ - $ - $ 33,708
Services 26,931 - -
26,931 Total net revenues 60,639
- - 60,639 Cost of net
revenues: Products 20,878 (638 ) - 20,240 Services 8,631
(626 ) - 8,005 Total cost
of net revenues 29,509 (1,264 ) -
28,245 Gross profit 31,130
1,264 - 32,394
Operating expenses: Research and development 32,080 (3,080 ) -
29,000 Sales and marketing 14,774 (1,102 ) - 13,672 General and
administrative 11,516 (2,048 ) - 9,468 Restructuring charges
2,007 - (2,007 ) - Total
operating expenses 60,377 (6,230 )
(2,007 ) 52,140 Operating loss (29,247 ) 7,494
2,007 (19,746 ) Interest income 615 - - 615 Other income 17
- - 17 Loss before
provision for income taxes (28,615 ) 7,494 2,007 (19,114 )
Provision for (benefit from) income taxes 632
(229 ) - 403 Net loss $ (29,247 ) $
7,723 $ 2,007 $ (19,517 ) Basic and diluted
net loss per common share $ (0.42 ) $ (0.28 ) Shares used in
basic and diluted net loss per common share 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, 2011 2010
2011 2010
GAAP and Non-GAAP net revenues as reported $ 22,496 $ 26,751
$ 60,639 $ 85,379 GAAP cost of net
revenues as reported $ 11,727 $ 13,080 $ 29,509 $ 42,715
Stock-based compensation expense (363 ) (546 )
(1,264 ) (1,722 ) Non-GAAP cost of net revenues $ 11,364
$ 12,534 $ 28,245 $ 40,993 GAAP
gross profit as reported $ 10,769 $ 13,671 $ 31,130 $ 42,664
Stock-based compensation expense 363 546
1,264 1,722 Non-GAAP gross
profit $ 11,132 $ 14,217 $ 32,394 $ 44,386
As a percentage of net revenues: GAAP gross profit as
reported 47.9 % 51.1 % 51.3 % 50.0 %
Non-GAAP gross profit 49.5 % 53.1 % 53.4 %
52.0 % GAAP operating loss as reported $ (8,275 ) $
(7,129 ) $ (29,247 ) $ (26,361 ) Stock-based compensation expense:
- Cost of net revenues 363 546 1,264 1,722 - Research and
development 875 1,257 3,080 3,944 - Sales and marketing 388 424
1,102 1,735 - General and administrative 641 1,063 2,048 3,272
Restructuring (credits) charges - (139 )
2,007 900 Non-GAAP operating loss $
(6,008 ) $ (3,978 ) $ (19,746 ) $ (14,788 ) GAAP net loss as
reported $ (8,251 ) $ (7,254 ) $ (29,247 ) $ (25,664 ) Stock-based
compensation expense 2,267 3,290 7,494 10,673 Restructuring
(credits) charges - (139 ) 2,007 900 Tax benefits (provision)
85 84 229 (41 )
Non-GAAP net loss $ (5,899 ) $ (4,019 ) $ (19,517 ) $ (14,132 )
Basic and diluted Non-GAAP net loss per common share $ (0.08
) $ (0.06 ) $ (0.28 ) $ (0.21 ) Shares used in basic and
diluted Non-GAAP net loss per common share 71,203
68,853 70,448 68,067
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