Concurrent Sidesteps M&A Talk
During the Q&A session, an analyst asked if the video-on-demand (VOD) supplier had "considered" potentially putting the company up for sale, arguing that the company has "really gone nowhere in the last two or three years."
"We can't really comment on that, per se," said Concurrent president and CEO Dan Mondor, who took the helm of the company in April, replacing Gary Trimm. (See Concurrent CEO Quits.) "We're focused on executing the business." [Ed. note: Does that mean killing the business?]
The analyst rephrased his question, asking if any strategic buyers have approached Concurrent, noting that company revenues were down 10 percent sequentially in the fiscal fourth quarter, and that the company's negative growth rate "isn't a one quarter phenomenon."
"I think Dan's already reiterated. We can't ever comment on those types of activities," responded Concurrent CFO Emory Berry, countering that the company's full-year revenues and margins did improve.
Well, just barely. Company-wide revenues for fiscal 2008 were $70.8 million, versus $69.1 million, a 2.4 percent increase. However, revenues for Concurrent's on-demand product line dropped to $41.6 million, versus $43.3 million. For the fourth quarter, revenues declined 9.1 percent, to $17.6 million. On-demand-related revenues dropped 16.2 percent, to $10.1 million. Concurrent also posted a quarterly net loss of $1 million (12 cents per diluted share), versus year-ago net income of $301,000 (4 cents per fully diluted share).
In July, Concurrent, in an attempt to regain Nasdaq compliance, initiated a 10-for-1 reverse stock split of its common stock after investors approved the move. (See Concurrent Investors OK Split.)
Another hot topic on the call was the network digital video recorder (nDVR) following a favorable court ruling on Cablevision Systems Corp. (NYSE: CVC)'s so-called "remote-storage" DVR. (See Court Resurrects Cablevision's Network DVR and Network DVR Still Paused .)
Concurrent predictably viewed the ruling as a positive for the vendor.
The nDVR "is in our sweet spot," Mondor said, citing "Start Over" deployments Concurrent already has underway with MSOs such as Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks . "We are very well-positioned to benefit from that trend towards [the] network DVR. We have solutions that satisfy the results of that, which will [include] very high [ingest] rates and storage capacity."
But the ruling doesn’t mean operators will be deploying nDVR services at the drop of a hat, as it's possible that the Cablevision case will face an appeal. "We've had... conversations with the operators, and the feedback we're getting is that they're going to proceed cautiously [with] nDVR applications," said Jim Brickmeyer, Concurrent's VP of product line management.
— Jeff Baumgartner, Site Editor, Cable Digital News