UB takes rap for Newbridge strife

Newbridge Networks has revealed the extent of the problems stemming from its troubled acquisition of UB Networks, in its disappointing third quarter results.

The vendor was forced to write off $181 million in relation to the purchase.

As predicted in its preliminary financials for the third quarter ended 1 February 1998, it attributed the significant restructuring charge to last year's $108 million acquisition, including a write-down of inventory and facilities closure costs. Newbridge has also disposed of its broadband networks unit, gaining $48 million from the sale.

Net losses for the quarter were $144.3 million, including an additional $26.4 million charge for research expenses for Israeli company RadNet, which was recently acquired by Newbridge and Siemens. Third quarter revenues were at $359 million, an increase of 8 per cent on $333 million for the same quarter in 1997.

In a statement to PC Dealer, Newbridge identified diminishing sales of its TDM technology, in areas including Europe, Asia and Latin America, as contributing to the dip in revenues.

A Newbridge representative said the problems were a result of market acceptance rather than the vendor's products.

She added: 'Some markets are more advanced than countries such as Hungary, where technology is just beginning to emerge.'

The representative also rejected suggestions that another 150 staff had been made redundant on 2 February, in addition to the 280 job losses in December last year.

'These 150 people were part of the original redundancies which were made last year, but they are leaving now,' she said.

She added that there would be no more job losses at the company in the foreseeable future.