Strapped for cash and unable to come up with a transaction, sale or merger for its assets, fixed wireless broadband provider Hybrid
Networks Inc. called it quits Thursday.
The San Jose, Calif. firm, which made routers, management software, and modems that wireless system operators and regional telephone
companies use to deliver broadband Internet access to businesses and consumers, said that it expects that revenue for the first
quarter of 2002 will not exceed $700,000 and that it has no cash for future periods.
Moreover, as of tomorrow, the firm will lay off
80 percent of its remaining staff, leaving a handful of workers. That move follows staff reductions made February 20, when it
pink-slipped nine people when it faced liquidity issues. The previous November, Hybrid laid off 15.
Layoffs have been par for the course in the last two years, as bottoms fell out in tech sectors across the board. Perhaps more
telling of Hybrid’s struggles than a few layoff rounds, were the liquidity issues the company revealed in February, when it said its
current liabilities, including the $5.5 million debenture due April 30, 2002, exceeded its cash and cash equivalents by some $4.2
million at December 31, 2001, and that working capital was only $736,000.
Corresponding with the liquidity issues and layoffs, Hybrid Networks President and CEO Michael D. Greenbaum cited a
severely weakened telecommunications industry as factors for his firm’s troubles. But he also noted that his firm hadn’t counted on
telecommunications providers’ decisions to curtail domestic expansion. In particular, he singled out Sprint Corp.’s
expansion reduction as a blow to Hybrid. Sprint owned 30 percent of Hybrid, and had inserted a few members on Hybrid’s board.
“We faced a number of challenges in 2001, including a slowing domestic economy, weakening telecommunications industry, and
dramatically reduced demand for the Company’s products by our key customers as a result of their revised business strategies,”
Greenbaum said.
As for the winding down process which commences tomorrow, Hybrid Networks will have less than $1 million in cash in the coffers
after compensating laid off workers and other expenses. It expects to cease operating by April 30.
While Hyrbid Networks ight be the latest systems provider to punch out, others are coping with their own troubles. Just this past Monday, ethernet provider Yipes Communications Inc. filed for Chapter 11 bankruptcy protection, basically because it could not find sufficient capital to remain freestanding.
Hybrid Networks Closes Up Shop
