BigBand Networks Inc. (BBND) filed Quarterly Report for the period ended 2009-09-30.
BigBand Networks Inc. is a leading provider of broadband multimedia infrastructure for video voice and data. The company's solutions are designed to process optimize and deliver services such as broadband Internet VoIP digital broadcast television HDTV transport of high quality video local advertising VOD interactive TV and IPTV across coaxial cable fiber or copper. Service providers use BigBand Networks' platforms to cost-effectively expand revenue-generating offerings of rich content and advanced interactive services. Customers include six of the ten largest service providers in the U.S. and leading service providers in North America Asia Europe and Latin America. Bigband Networks Inc. has a market cap of $271.1 million; its shares were traded at around $4.09 with a P/E ratio of 16.3 and P/S ratio of 1.5.
Highlight of Business Operations:
Research and development expense was $34.3 million for the nine months ended September 30, 2009, or 32.6% of net revenues, compared to $40.4 million for the nine months ended September 30, 2008, or 30.8% of net revenues. The decrease of $6.1 million was due to a $3.3 million decrease in salary and related benefits as a result of a shift of headcount to a more cost effective location in Shenzhen, China, a decrease of $1.9 million in bonus expense, and a $0.9 million reduction in independent contractor costs. In addition, travel, facility costs and other overhead expenses decreased $0.7 million due to cost containment efforts. These factors were partially offset by a $0.7 million increase in stock-based compensation, which was $3.6 million for the nine months ended September 30, 2009 compared to $2.9 million for the nine months ended September 30, 2008.
Sales and marketing expense was $18.3 million for the nine months ended September 30, 2009, or 17.4% of net revenues, compared to $21.9 million for the nine months ended September 30, 2008, or 16.7% of net revenues. The decrease of $3.6 million was primarily due to a $2.8 million decrease in compensation expense and a $0.5 million decrease in travel expenses, both related to a reduction in headcount. Additionally, overhead expenses decreased by $0.2 million due to cost containment efforts. Stock-based compensation expense was $1.8 million for the nine months ended September 30, 2009 compared to $1.9 million for the nine months ended September 30, 2008.
General and Administrative. General and administrative expense was $4.6 million for the three months ended September 30, 2009, or 20.7% of net revenues, compared to $5.4 million for the three months ended September 30, 2008, or 11.3% of net revenues. The decrease of $0.8 million was primarily due to a $0.5 million decrease in bonus expense, a $0.2 million decrease in salary and related benefits as a result of a reduction in headcount and a decrease of $0.3 million in outside services and overhead expenses. These factors were partially offset by a $0.2 million increase in stock-based compensation, which was $1.2 million for the three months ended September 30, 2009 compared to $1.0 million for the three months ended September 30, 2008.
General and administrative expense was $14.1 million for the nine months ended September 30, 2009, or 13.4% of net revenues, compared to $15.6 million for the nine months ended September 30, 2008, or 11.9% of net revenues. The decrease of $1.5 million was primarily due to $0.9 million decrease in litigation-related activities and Sarbanes-Oxley 404 compliance work, a $0.6 million decrease in bonus expense as a result of a decline in our financial performance, a $0.4 million decrease in base compensation and related benefits as a result of a reduction in headcount, and a $0.4 million decrease in facility and overhead expenses as a result of cost containment efforts. These factors were partially offset by an increase in stock-based compensation, which was $3.5 million for the nine months ended September 30, 2009 compared to $2.6 million for the nine months ended September 30, 2008.
Restructuring Charges. Restructuring charges were zero for the three months ended September 30, 2009 compared to $0.7 million for the three months ended September 30, 2008. Restructuring charges were $1.4 million for the nine months ended September 30, 2009, compared to $2.2 million for the nine months ended September 30, 2008. Restructuring charges for the nine months ended September 30, 2009 included $0.7 million for severance and related costs pursuant to which employees were terminated, and a $0.7 million charge related to the expected increased time and cost required to sublease our vacated facility as a result of an unfavorable leasing environment. The facility was originally closed as part of our October 2007 restructuring plan. The costs associated with facility lease obligations are expected to be paid over the remaining term, which extends to March 2012. Restructuring charges of $2.2 million for the nine months ended September 30, 2008 related to lease termination charges of $1.7 million and severance and related expenses of $0.5 million due to a reduction in headcount.
Income tax expense for the three months ended September 30, 2009 was $0.2 million on a pre-tax loss of $10.6 million, compared to $35,000 of income tax benefit on pre-tax income of $3.1 million for the three months ended September 30, 2008. Income tax expense for the nine months ended September 30, 2009 was $0.8 million on a pre-tax loss of $4.7 million, compared to $0.7 million of tax expense on pre-tax income of $3.1 million for the nine months ended September 30, 2008.
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