Extreme Scores Hat Trick
For its fourth quarter, which ended July 2, Extreme reported net losses of $1.8 million, 2 cents per share, on revenues of $82.4 million compared with losses of $2.8 million, 2 cents per share, on revenues of $85.5 million in the previous quarter. (See Extreme Reports Q4.)
For its fourth quarter a year ago, Extreme reported net income of $100,000, zero cents per share, on revenues of $96.1 million.
Extreme's non-GAAP net income of zero cents per share ($400,000 total) fell short of the consensus forecast of 4 cents per share, according to Thomson Financial . And revenues lagged the $88.2 million analysts had expected.
Extreme stock was down 32 cents (8.6%) at $3.41 in after-hours trading.
Product revenues might have risen from the previous quarter had Extreme not run into "product constraints," officials said on yesterday's conference call with analysts.
"The good news is we saw strengthening demand for our modular systems," namely the BlackDiamond series, CEO Gordon Stitt said on the call. The bad news is that demand was so high that Extreme "missed some shipments late in the quarter," he said.
Extreme will be increasing its inventory to compensate and expects to catch up on those shipments this quarter. Still, the result for the end of June was the third consecutive quarter of declining revenues. (See Extreme Miss and Extreme Slump Continues.)
It's not certain Extreme would have met analysts' $88.2 million forecast for revenues even if it had made all of its shipments, CFO William Slakey said on the conference call.
The quarter's results just add to the uncertainty surrounding the company's executive turnover. Stitt recently announced plans to step down as CEO, although he'll still be involved with Extreme, and Slakey is starting the process of leaving the company. Permanent replacements for the two haven't yet been named, although Stitt noted during the call that the CEO search has been narrowed down to a handful of candidates. (See Stitt Gets Less Extreme and Extreme Swaps CFOs.)
Stitt reiterated during the call that his departure isn't related to Extreme's fortunes. "This decision was a personal one based on a commitment I made to my family several years ago," he said.
Separately, Extreme is still planning to move to new headquarters in the second half of 2007, following a sale of the property it occupies now. The property first has to be rezoned for residential development, a process that's expected to take at least a year.
— Craig Matsumoto, Senior Editor, Light Reading