Meru Networks Cuts Q4 Revenue Outlook; Hires Advisor To Explore Options

(RTTNews) - Meru Networks, Inc. (MERU) on Tuesday lowered its fourth quarter revenues outlook to a range of $21.0 million to $22.0 million from its prior outlook of $23.0 million to $27.0 million.

Analysts polled by Thomson Reuters currently expect the company to post revenue of $24.96 million for the fourth quarter.

Meru also announced a restructuring of the company designed to reduce breakeven from about $27.0 million in quarterly revenues to about $21.5 million to $22.5 million by the end of the first quarter of 2015, with target gross margins at 62.5%. Meru expects to incur restructuring and one-time charges of $1.5 million to $2.0 million in the first quarter of 2015.

The restructuring is expected to impact every department across all geographies, and is expected to reduce headcount by more than 10% of the full-time employees along with about 20 contractors in the first quarter of 2015. The restructuring consolidates certain functions and flattens the organization while reducing operating expenses and cash burn, and accelerates a return to operating profitability.

Addtionally, the company announced the resignation of Kevin Coppins, the company's Vice President of Sales for North America, effective January 12. Tom Palomaki, the company's Vice President of Worldwide Support and Services, has been appointed to serve as the company's new Vice President of Sales for North America.

Meru further said that it had retained Deutsche Bank as its exclusive financial advisor to explore strategic options, including, but not limited to, strategic partnering of its technology and possible sale or merger of the company.

Meru will report fourth quarter and full year 2014 results on February 9 after the market closes.