Rough Times Continue at Envivio
Sales weakness in the Americas and Western Europe during the third quarter exacerbated an already ugly situation at Envivio Inc. (NASDAQ: ENVI), the multi-screen video processing specialist that went public in April. (See Envivio Pulls the IPO Trigger.)
After warning that it would miss third-quarter targets, the company posted a net loss of US$5.6 million (21 cents per share) on revenues of $7.2 million, down 47 percent year-on-year. It issued a similar warning in a tough second quarter. (See Envivio Shares Fall More Than 50% in 3 Hours.)
On the company's third-quarter earnings call Wednesday afternoon, Envivio President and CEO Julien Signes cited a "lack of adequate sales coverage in North America" for some of those disappointing numbers.
As a result, the company is reorganizing its sales coverage model in the Americas and hiring David Baranski, late of Terayon Communications, Cheetah Technologies LP and IneoQuest Technologies Inc. , as VP of sales for the region.
The company has also eliminated the role of COO and created a new VP of global sales position that it intends to fill in the next 90 days. The odd man out is COO Kevin O'Keefe, whose departure becomes effective Dec. 31, according to an 8-K filing. He'll get his current monthly base salary of $17,118 for another six months. O'Keefe was handling sales, related marketing support and customer service.
And the hits keep coming. Rival RGB Networks Inc. announced today that ex-Envivio exec Scott Pranger has joined as VP of Global Channels, where he'll work deals with resellers and system integrators.
Envivio said its lack of sales coverage took it out of contention for some deals in North America, but the broader, global economic environment has also taken its pound of flesh. Signes noted that an existing customer in the Middle East had planned a $1.2 million expansion, but reduced it to $160,000 due to budget cuts. One of its large cable customers in Latin America, meanwhile, delayed a $750,000 expansion during the third quarter.
Signes said Envivio ended the quarter with more than 59 multi-screen wins. Time Warner Cable Inc. (NYSE: TWC) is its marquee U.S. customer.
Envivio shares were down 4 cents (2.45 percent) to $1.59 each in morning trading Wednesday. Envivio shares opened at $9 when the company went public on April 25.
— Jeff Baumgartner, Site Editor, Light Reading Cable