Feeds

The great Enterasys boardroom exodus

CEO, COO and marketing chief take a hike

  • alert
  • submit to reddit

Mobile application security vulnerability report

Enterasys yesterday announced the departure of three key staff, including its chief executive, as it warned that revenues for quarter would be lower than expected.

Enrique Fiallo resigned as chairman, chief executive officer, and president of the enterprise networking supplier yesterday in order to "pursue other business opportunities". J.E. Riddle, vice chairman and executive vice president of worldwide marketing, and Jerry Shanahan, chief operating officer also resigned their positions.

The company appointed of William O'Brien, who's previously worked as a senior executive with management consultants PricewaterhouseCoopers, as interim chief executive officer and director, and Yuda Doron as president to fill the gaps left by the departing executives.

In a statement, Enerasys board member Jim Davidson admitted the two were joining the company at a "challenging" time during which it is "operating in a very difficult environment".

As well as contending with the general downturn in the networking market, which has been sharper than that experienced in other sectors of the IT industry, Enerasys is facing a probe on its accounting practices by the Securities and Exchanges Commission (SEC).

At the time, Enterasys said it was delaying its fourth quarter results because of an "apparently unrelated matter" arising from the terms of a $4 million sales contract recorded by its Asia Pacific operations. Days later it announced a delay in the planned spin off of its Aprisma network management business.

Law firm Ropes & Gray and audit firm Deloitte Touche Tomatsu are assisting Enterasys in completing a comprehensive review of its revenue recognition practices.

Enterasys has revised its fourth quarter revenue estimates down from the previously announced $221.1 million to between $145-155 million. The company now expects to report a loss from operations in its fourth quarter.

For the first quarter ended March 30, 2002 Enterasys Networks estimates revenue of approximately $110-120 million. These estimate reflect the "continued lengthening of the sales cycle due to difficult market conditions, poor sales execution, and the previously announced Securities and Exchange Commission investigation", Enterasys said.

The company expects to post an operating loss for Q1 2002, and a cash decrease of approximately $70 million.

To stem losses, Enterasys plans to restructure its business to achieve break even - a move almost certain to be accompanied by further job loses.

The Company will provide more detailed financial results for its last two quarters and an update concerning the SEC investigation "as soon as practicable". The firm expects to miss the April 15 deadline for submitting its annual report. ®

Related Stories

Enterasys faces SEC probe
Cabletron does OK amid networking gloom
Cabletron shares jump as company splits

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.