Redback Trims Losses, CFO
The company also announced significant executive departures with the fourth-quarter earnings results. CFO Dennis Wolf, who has held the post since January 2001, is leaving the company. In addition, Pankaj Patel, the former Siara executive who led Redback’s research and development team, and Lars Rabbe, Redback's chief information officer, are also leaving the company.
Redback is now led by four VPs who all report to CEO Kevin DeNuccio. These executives are Tom Cronan, VP of finance and administration and chief financial officer; Georges Antoun, senior VP of engineering and product management; Joel Arnold, SVP of worldwide field operations; and Ebrahim Abbasi, senior VP of operations and information technology.
Redback's overall head count stands at 596, down 16 percent from the 711 it employed last quarter.
The cuts were spurred by revenues that continue to shrink. Any way you slice it, they continued to fall; its quarterly revenues fell 31 percent and its yearly revenues fell 45 percent compared to their year-ago totals.
The company's net revenue for the fourth quarter was $27.6 million, compared to revenues of $40.2 million for the year-ago quarter. Redback's pro forma net loss for the quarter was $26.8 million, or 15 cents a share, compared with a pro forma loss of $29.8 million, or 20 cents a share, a year earlier.
Sequentially, the fourth-quarter revenue of $27.6 million was up from $17.4 million in the prior quarter.
The company did manage to meet Wall Street's expectations, though it came up a tad short on revenue. Analysts surveyed by First Call expected the company to lose 15 cents a share on revenues of $26.1 million.
Redback's revenues for the full year 2002 were $125.6 million -- that's 45 percent lower than the $227.5 million reported for fiscal year 2001. The company's actual fourth-quarter net loss was $34.2 million, or 20 cents a share, better than the net loss of $99.2 million, or 67 cents a share, during the year-ago period.
Its top customers, SBC Communications Inc. (NYSE: SBC) and Nokia Corp. (NYSE: NOK), each accounted for more than 10 percent of revenues during the quarter. Nokia owns 10 percent of Redback.
Going forward, Redback's executives tried to keep a stiff upper lip, saying they expect to see improvements in revenues throughout Asia as DSL deployments there continue to increase. It expects revenues will be up five to 10 percent sequentially for the first quarter of 2003. It's worth noting that even if Redback hits the top end of that projection and reports $30.4 million in second quarter revenues, that would still represent a 24 percent year-over-year drop in revenues (see Redback Regroups With Narrower Loss).
— Phil Harvey, Senior Editor, Light Reading