10-05-13 02:11 AM
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  1. the_sleuth's Avatar
    Well, there's no way to sugar coat it. so here it is:

    David Friend, Canadian Press | 01/10/13 | Last Updated: 01/10/13 7:33 PM ET

    TORONTO BlackBerry Ltd. says the cost of reworking its operations will likely be four times as much as it estimated earlier this year and may turn out to be even be higher than that.According to financial report documents filed with
    regulators, the smartphone maker expects to book US$400-million in charges from a variety of factors before the end of May 2014.

    Those expenses will cover costs associated with the previously announced layoffs of 4,500 employees, the reworking of its smartphone lineup and other changes to its manufacturing, sales and marketing operations, it said.

    Earlier this year, BlackBerry said it would likely book $100-million in charges through its fiscal 2014 year, as it cut back staff and reduced other costs. Since then, the companys financial results have weakened, mostly on poor sales of its BlackBerry Z10 touchscreen phones.

    Last week, the company booked a US$965-million loss for the second quarter and announced the massive layoff that will extend into next year.
    The documents provide the clearest picture yet of whats happening behind the scenes at the struggling Waterloo, Ont.,-based technology company. BlackBerry has been trying to regain control of its quickly eroding share of the smartphone market while also scaling back bloated operations.

    It disclosed that it has marked certain unnamed assets as redundant and some have already hit the auction block, including properties, as well as plants and equipment, though the company did not identify anything specific.

    For the second quarter, BlackBerry said it booked a loss of $7-million related to the declining value of those assets.

    While BlackBerry stopped providing specific data for its subscriber base earlier this year, saying that it no longer accurately reflects its business model, the company said customers continued to decline in the second quarter in every region except the Asian-Pacific market.

    In its outlook, the company said monthly service revenues are expected to decline further in the third quarter, though not at the escalated rate experienced in the second quarter. The company said service revenue dropped about 27% to $724 million in the three months ended Aug. 31.

    It expects service revenues to fall another 12% in the third quarter.

    Last week, BlackBerry received a conditional takeover offer from Fairfax Financial, one of BlackBerrys largest shareholders, worth $9 per share. The transaction values the company at $4.7-billion.

    The Canadian Press
    BlackBerry Ltd says restructuring costs have quadrupled to US$400-million | Financial Post
    10-01-13 08:04 PM
  2. playbookster's Avatar
    Yep, turning out to be a complete restructure from bottom to kinda near the top. Laying off 4500 hundred people costs a lot in severance pay

    Posted via CB10
    donmateo likes this.
    10-01-13 08:07 PM
  3. amazinglygraceless's Avatar
    Yep, turning out to be a complete restructure from bottom to kinda near the top. Laying off 4500 hundred people costs a lot in severance pay
    It does but not all of those people would qualify for severance or post-employment benefits (at $400 million that is almost $89K per). I suspect a good chunk will not. It will be interesting to see how that number breaks down...that is, if BlackBerry makes that available.
    10-01-13 08:16 PM
  4. zzbsb's Avatar
    No worries they've got lots of cash.
    10-01-13 08:17 PM
  5. kevinnugent's Avatar
    In its outlook, the company said monthly service revenues are expected to decline further in the third quarter, though not at the escalated rate experienced in the second quarter. The company said service revenue dropped about 27% to $724 million in the three months ended Aug. 31.

    Um, at the present rate of 27% per quarter, how long will it take to reach zero? Damn.... they are bleeding FAST!
    10-01-13 08:22 PM
  6. richardat's Avatar
    No worries they've got lots of cash.
    LOL...no company (goodbye employees and assets), no business (hey, we don't make money that way anymore!), and no plans (we're restructuring....or being bought...or both...to what? um...prosumers....)

    ....but.....no debt! yeah!!!!

    Actually it's brutal to watch. I think the deniers make it worse....creating and dragging out threads, making people rehash the clear evidence and the reality over and over and over and over. It's entirely different to discuss the history, what got us here, and responsibility, but going to a terminal patients hospital bed, during what should be his last quiet moments and grabbing all the friends and family and yelling "he's fine!!! He's going to be better than ever soon! This is a GOOD thing!!! Bunch of jerk naysayers!!!!" Those people need a severe virtual punch in their nose cones.

    Well, aside from the employees - whom we cannot help, I suppose it is just a corporation - so let the GAMES CONTINUE!!!
    10-01-13 08:28 PM
  7. amazinglygraceless's Avatar
    No worries they've got lots of cash.
    ...and NO DEBT!! Never forget, they have no debt

    EDIT: crap! foiled by the fast fingers of richardat...again
    10-01-13 08:30 PM
  8. danprown's Avatar
    "Severance" is the government minimum, and even then, there are special rules when there are mass layoffs. You have to examine the individual employment contracts and the circumstances. I doubt most of these people make less than $50,000 per year or do manual labour. For example, if they have "poached" an engineer from a rival firm, then his package must reflect the loss of opportunity if he is sacked within a year. The rule of thumb is 1 month of pay per 1 year of service. So if you are getting rid of a lot of "dinos" it is quite likely that their package could approach 6 months to 1 year of salary...

    It does but not all of those people would qualify for severance or post-employment benefits (at $400 million that is almost $89K per). I suspect a good chunk will not. It will be interesting to see how that number breaks down...that is, if BlackBerry makes that available.
    amazinglygraceless likes this.
    10-01-13 08:36 PM
  9. AnimalPak200's Avatar
    ...and NO DEBT!! Never forget, they have no debt

    EDIT: crap! foiled by the fast fingers of richardat...again
    Pretty sure zzsb was being sarcastic... or at least I hope so... lol

    Posted via CB10
    richardat likes this.
    10-01-13 08:39 PM
  10. amazinglygraceless's Avatar
    @danpbrown: I got most of that and thanks for filling in the rest. Where I was going with that was that despite the number of layoffs and whatever severance or benefits that are needed to be paid out, that $400 million is probably made up of more (on a percentage basis) than employment costs.
    10-01-13 08:43 PM
  11. amazinglygraceless's Avatar
    Pretty sure zzsb was being sarcastic... or at least I hope so... lol
    I think so too, which is why we responded with the same
    richardat and soren203 like this.
    10-01-13 08:44 PM
  12. h20work's Avatar
    ...and NO DEBT!! Never forget, they have no debt

    EDIT: crap! foiled by the fast fingers of richardat...again
    I meant to ask you when the q2 results were posted. I noticed the cash on hand figure was $1.18, short term investments were $1.16b and long term investments were $225m. What are your thoughts on the breakdown?
    10-01-13 08:48 PM
  13. danprown's Avatar
    Oh yes, for sure, sorry if I misunderstood, HR costs, legal costs, "retooling," closing down offices, these people also must "transfer" their knowledge to the company, it is a massive undertaking, you are right.

    Frankly, however, reading the MD&A for Q2 just posted this evening, this is the least of their worries...

    Where is Waldo TH in all this...

    @danpbrown: I got most of that and thanks for filling in the rest. Where I was going with that was that despite the number of layoffs and whatever severance or benefits that are needed to be paid out, that $400 million is probably made up of more (on a percentage basis) than employment costs.
    richardat and anon1727506 like this.
    10-01-13 08:56 PM
  14. Bla1ze's Avatar
    10-01-13 08:57 PM
  15. crackbrry fan's Avatar
    No Debt,13 Billion in assets,including cash! Not going Bankrupt with those severances! 3.1 billion in liability,posted there 2011,12 and 13 balance sheet here as well scroll down

    Posted via CB10
    Last edited by crackbrry fan; 10-02-13 at 09:27 AM.
    10-01-13 09:01 PM
  16. amazinglygraceless's Avatar
    I meant to ask you when the q2 results were posted. I noticed the cash on hand figure was $1.18, short term investments were $1.16b and long term investments were $225m. What are your thoughts on the breakdown?
    Looks appropriate for what they are reporting
    1.18 is Cash and Cash Equivalents
    1.16 is STI, (investments that are readily convertible to cash)
    These two items are the majority of the $2.6 billion cash that BlackBerry mentions

    The $225 million in LTI is not a Current Asset and therefore not part of the available cash. Generally, STI are things convertible to cash within a year or less (Current Asset). LTI is a year or more and LTI is almost NEVER considered a current asset
    h20work, richardat and stlabrat like this.
    10-01-13 09:02 PM
  17. h20work's Avatar
    No Debt,13 Billion in assets, not including cash! Not going Bankrupt with those severances!

    Posted via CB10
    $13b??? Where did you come up with that number?
    10-01-13 09:10 PM
  18. amazinglygraceless's Avatar
    $13b??? Where did you come up with that number?
    Simple, you just multiply by two, add the square root of Pi and carry the 1....
    10-01-13 09:15 PM
  19. h20work's Avatar
    Looks appropriate for what they are reporting
    1.18 is Cash and Cash Equivalents
    1.16 is STI, (investments that are readily convertible to cash)
    These two items are the majority of the $2.6 billion cash that BlackBerry mentions

    The $225 million in LTI is not a Current Asset and therefore not part of the available cash. Generally, STI are things convertible to cash within a year or less (Current Asset). LTI is a year or more and LTI is almost NEVER considered a current asset
    Never really understood counting lti as "cash", sti I can see as long as there is no risk involved.

    The way I see it reported around here, people seem to think bbry actually has $2.6b cash sitting in a safe.
    10-01-13 09:20 PM
  20. h20work's Avatar
    Simple, you just multiply by two, add the square root of Pi and carry the 1....
    Ah, that makes sense.

    If bbry had $13b in assets not counting their cash, I'm sure I could get a loan from Wells Fargo tomorrow for what Prem was offering.
    richardat and blueberrymerry like this.
    10-01-13 09:23 PM
  21. kevinnugent's Avatar
    What a depressing read. I'm surprised at the 7.6% figure of sales in Canada though. I thought patriotism was rife there.
    10-01-13 09:23 PM
  22. crackbrry fan's Avatar
    Simple, you just multiply by two, add the square root of Pi and carry the 1....
    BlackBerry has found itself a buyer.

    But the $4.7 billion offer by Fairfax Financial Holdings, the Canadian insurance and investment company, to take the company private does not necessarily resolve the company?s problems. There is no guarantee that Fairfax will close the deal, and while its letter of intent includes a go-shop provision, it is unclear whether a rival suitor will surface.

    BlackBerry seems to have been in decline for what seems like forever, even though the rival product that started the erosion, the iPhone, dates only to 2007. The company announced on Friday that it expected to report a quarterly loss of nearly $1 billion and planned to lay off about 4,500 people, or 40 percent of its work force.

    A new owner might be able to help. Of course, the new owner might also just want to extract maximum value on the way down. There is another option: It becomes natural to wonder whether BlackBerry might eventually seek to restructure under Chapter 11 or its Canadian counterpart, the Companies Creditors Arrangement Act.

    It?s a question I?m asked almost every week, but I almost always answer no. Or, at least, not anytime soon. The company has not given any indication that it is considering such a move, either.

    The C.C.A.A. is the closest analog to Chapter 11 in Canada, but it differs in a few important respects. For one, the C.C.A.A. requires insolvency before filing. This contrasts with Chapter 11, which does not require insolvency to enter the process, although the debtor must be acting in ?good faith.? As described by my Canadian colleagues, the C.C.A.A. is a bit vague about what precisely constitutes insolvency. BlackBerry?s balance sheet shows $13 billion in assets compared with $3.7 billion in liabilities. That sure doesn?t look like insolvency.

    In another difference, instead of creditors? committees, the C.C.A.A. uses a monitor, a single individual who reports to the court. A monitor falls somewhere between a trustee and an examiner in a Chapter 11 proceeding. The monitor plays a crucial oversight role but is not quite as intrusive as a full-blown trustee.

    The challenge BlackBerry faces is reducing its operations as it customer base shrinks. Companies that fail to adjust to current reality can quickly find themselves insolvent as they try to pay for the infrastructure of an older, grander operation with the revenue of a newly smaller business. BlackBerry is burning shareholder value like a fire on a drought-stricken hillside, but as long as the company shrinks its costs along with its size, it can avoid bankruptcy.

    Posted via CB10
    10-01-13 09:34 PM
  23. crackbrry fan's Avatar
    ...and NO DEBT!! Never forget, they have no debt

    EDIT: crap! foiled by the fast fingers of richardat...again
    Educate yourself you have been braying and making a big A** out of yourself!

    Posted via CB10
    10-01-13 09:37 PM
  24. howarmat's Avatar
    so it looks like out of the 5.9 million devices sold to end customers, 1.7 million of them were bb10 devices
    richardat and techvisor like this.
    10-01-13 09:44 PM
  25. kevinnugent's Avatar
    so it looks like out of the 5.9 million devices sold to end customers, 1.7 million of them were bb10 devices
    It's awfully hard to argue against facts, isn't it?
    richardat, mikeo007 and techvisor like this.
    10-01-13 09:48 PM
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