Banyan Systems (BNYN)
, which has been struggling with product delays and competition, today announced plans to cut roughly 25 percent of its workforce and consolidate some operations as it released first-quarter results that posted a loss and declining revenues.
Banyan said it will cut 20 to 25 percent of its workforce and consolidate some of its factory and product lines. This is expected to result in a pretax restructuring charge of $10 million to $13 million in the current second quarter.
The company, which produces networking software and offers related services, added it expects to take several quarters before it can return to profitability.
Shares of Banyan fell nearly 12 percent in morning trading to 1-27/32, down from a close of 2-1/8 on Friday.
Meanwhile, the company released its first-quarter earnings, posing a net loss of $6.4 million, or 37 cents a share, for the quarter ending March 31, compared with profits of $369,000 or 2 cents a share a year ago.
Analysts earlier this month revised their estimates to a loss of 33 cents a share after the company had released preliminary first-quarter figures that would not meet Wall Street's expectations. But Banyan's performance still fell short today of analysts' revised estimates.
Revenues for the first quarter were $20 million, down from $29 million a year earlier. The company cited delays of new products, sluggish sales to key customers, and skittishness among customers over the new management for falling revenues.
Banyan hired William Ferry as its new chief executive and president in February.
Analysts have previously said that Banyan faces the challenge of competing with the likes of Novell and Microsoft over some key products. In addition, delays have arisen as the company transitions to new products.