US broadband wireless equipment maker Hybrid Networks has warned that it may have to file for bankruptcy protection if it cannot find a buyer.
The announcement came as the company issued a warning that it does not expect to have sufficient revenues to meet operating expenses over the next year.
Hybrid has built its business around developing fixed wireless local loop systems for use in Multichannel Multipoint Distribution Services (MMDS) in spectrum in the US and around the world.
Over the past few years as first Sprint and then WorldCom started rolling out MMDS services in the US, Hybrid, which secured the bulk of Sprint's spending, looked to be well placed.
But yesterday the company joined the long list of equipment providers hit by a pullback in spending by the major US operators.
While it has faced a significant cutback in spending from Sprint, the effect has been compounded by a slower than expected take-up of its core MMDS fixed wireless technology in the international market.
"We believe that domestic and international revenues will be depressed for substantially all of 2002. As a result, we do not foresee sufficient revenues to meet our operating expenses," said Michael Greenbaum, president and chief executive at Hybrid.
The company saw fourth-quarter sales drop to $7.6m from $12.9m last year. Current liabilities, including $5.5m in debt due on 30 April, exceeded its cash and cash equivalents by about $4.2m as of 31 December last year. Working capital at the time was only $736,000.
Hybrid said that it has been evaluating strategic alternatives including a sale or merger for some time, but that there was no assurance that it would be able to consummate a deal and may seek bankruptcy protection.
In a further attempt to cut operating costs the company stated yesterday that it would cut nine positions, or 18 per cent of its staff. This follows a workforce reduction of 15 in November.
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