Concurrent Cuts Staff, Expects Bigger Q4 Loss
Cable Guy Alan Breznick, Cable/Video Practice Leader, Light Reading 7/19/2006
Ranking as the second largest VOD vendor after SeaChange International, Concurrent also said it has laid off about 7 percent of its employees as part of a longer-term cost-cutting effort. The company reportedly had approximately 400 workers before the staffing cuts, suggesting that it issued pink slips to around 28 employees.
Concurrent said it now expects to report $15 million to $17 million in revenues for its fiscal fourth quarter ended June 30, down from the $22 million that Wall Street analysts had been projecting. As a result, the equipment supplier projects that it will post a per-share loss of 5 cents to 7 cents for the quarter, a marked falloff from the 1 cent per-share loss that had been expected.
The publicly traded company blames the projected shortfall at least partly on "increased pricing pressure" in the crowded VOD market. It also cites a drop in international on-demand revenues because of "the timing of some deployments."
In addition to these factors, Concurrent pins the blame on the delay of a "large order" for its new Everstream unit during the spring quarter. Everstream, which Concurrent bought for roughly $15 million last year, makes a range of VOD measurement, reporting, analytical, and advertising tools for cable operators.
As might be expected, Concurrent executives put on a brave face about the underwhelming financial news, which sent the company's stock diving for cover. "Despite the disappointing results for this quarter, we remain optimistic about our business long-term," CEO Gary Trimm said. "The fundamentals for the on-demand market and our position in that market are strong."
It's not clear yet what impact the company's latest developments might have on its appeal to such possible larger suitors as Arris. Several market analysts and other sources believe that Arris is looking for a VOD vendor like Concurrent to expand into the video business.
Concurrent's disclosure of revenue shortfalls and staff cuts came just four days after the company announced a pact with Atlas Solutions, a provider of digital marketing technologies and expertise, to integrate their respective technologies and promote an end-to-end VOD ad campaign management and measurement system.