Symbol CEO Falls on Sword
Former Ciscoteer Bill Nuti has taken over from Richard Bravman as the CEO at Symbol Technologies Inc. (NYSE: SBL), as the company tries to put a year dogged by an SEC accounting investigation behind it (see Symbol Names Nuti CEO).
Bravman -- a 25-year veteran at Symbol who took up the CEO role just 17 months ago -- is the latest executive to resign because of the government investigation into its revenue statements, started in August 2002. The company's chief financial officer Kenneth Jaeggi stepped down at the beginning of 2003 (see Symbol CFO Resigns). The company's former chief accounting officer Robert Korkuc and former sales finance executive Robert Asti have pleaded guilty to federal charges that they had plotted to inflate Symbol's earnings figures.
Bravman says in a statement that he decided to resign because of his involvement -- "at the instigation of others" -- in the premature recognition of $860,000 in revenue in the first quarter of 2001. Bravman believes that by stepping down he can help bring the Securities and Exchange Commission (SEC) investigation to a close.
"When I learned that my connection to this transaction might influence the outcome of the government's investigation of Symbol, I realized that this is the right thing to do," says Bravman's statement.
The company has also completed the restatement of its revenues for the years 1998 through 2001 as well as the first three quarters of 2002 (see Symbol Postpones 10-K Filing). The company expects to file its Form 10-Q for 2003's first, second, and third quarters within the next few weeks.
After adjusting revenue and expenses, Symbol posted a net loss in each year from 1998 to 2002, CFO Mark Greenquist told Reuters. The firm had previously reported profits in 1998 and 1999 and losses in 2000 and 2001.
Speaking on a conference call, Nuti says that the results for the fourth quarter of 2003 will be released in February. Nuti added that his priority as CEO is to "get current with filings."
"Now that we are nearing the end of our long investigation into accounting improprieties by the former management of Symbol, our associates will be happy to have this chapter of the company's history behind us," he said.
Nuti joined Symbol from Cisco Systems Inc. (Nasdaq: CSCO) in July 2002 as COO. Nuti had been tipped as a possible successor to John Chambers for the top job at Cisco, but, according to industry scuttlebutt at the time, he wanted to stay true to his East Coast roots with Holtsville, N.Y.-based Symbol (see Cisco's Nuti Moves to Symbol).
A spokesperson for Symbol says that the changes at the top shouldn't affect product roadmaps. The firm, which pioneered the concept of the centralized wireless LAN switch, is due to launch a new 802.11 switch product in the first quarter of next year, though it will continue to sell its existing product lines.
It could be a tough sell, as the accounting scandal looks to have damaged Symbol's reputation in the enterprise wireless LAN market as a whole.
A recent market perception survey undertaken by our sister research division Heavy Reading found that Symbol "ranked fifth in corporate access point brand recognition (46.9 percent) and no higher than fourth in… remaining categories," such as price leadership, product performance, product quality and reliability, and service and support.
Yet in February of this year Synergy Research Group Inc. ranked Symbol as the third largest enterprise wireless LAN vendor, after Cisco and Proxim Corp. (Nasdaq: PROX). (See 802.11 WLAN Shipments Double.)
— Dan Jones, Site Editor, Unstrung