Sonus Redeploys CFO
The softswitch vendor announced today that it has extended its ongoing financial review to periods prior to 2002, and that the review and audit could be "lengthy." The possibility of an extension had been flagged by Sonus, so it was not a total surprise (see Sonus Financial Review Continues).
The review, which is focused on when revenue should be recognized on the balance sheet rather than if it should exist at all, was first announced in February (see Sonus Drops a Bomb).
In a separate statement the vendor announced that, with immediate effect, CFO Stephen Nill "transitions" to a new role: VP of business operations. The company could not provide any further detail about this role other than that it involves "administrative functions," so it's unclear whether Nill will be twiddling his thumbs in the office or spending more time with his pets and power tools until things blow over.
The new man in charge of the balance sheet is Bert Notini, who has been appointed president and COO. Notini will "assume responsibilities for the financial operations of the company" until a new CFO is appointed, according to the statement.
Lehman Brothers analyst Steve Levy regards the appointment of a COO as encouraging. In a research note issued today, Levy says he believes the creation of Notini's role "underscores management's intent to return its energies to growing the company."
Sonus could do with a turn in its financial fortunes. Having risen steadily as VOIP became the industry buzzword de jour last year, the company's share price hit a 12-month peak of $10 in January; began its decline when the firm delayed its fourth-quarter results (see Sonus Delays Q4 Results); and then plummeted when the revenue review was announced:
The share price has fallen slightly on today's news, dropping 5 cents to $4.03 from yesterday's closing price of $4.08.
The company is also set to meet with officials from Nasdaq regarding its continued listing on the exchange. As a result of being unable to file its financial report for 2003 because of the ongoing review, Sonus is no longer in compliance with Nasdaq's listing rules. It has had to change its ticker symbol from SONS to SONSE, and is due a hearing with a Nasdaq panel to determine its fate. The vendor notes there "can be no assurance that the Panel will grant a request for continued listing."
— Ray Le Maistre, International Editor, Boardwatch