Occam in the News
Occam chairman: No M&A or CEO search underway
By Ed Gubbins
October 26, 2007
Despite calls from some investors to replace top management or sell the company, Occam Networks has no plans to do either, according to the company's chairman and representative of its largest shareholder.
"There's no active engagement of any sale effort," said Steve Krausz, Occam's chairman of the board and general partner at U.S. Venture Partners, which owns nearly 18% of Occam. "We're always, as every company is, listening to the market. But we're pushing forward with our team. We're not actively selling the company."
Occam's board has begun work on a new employment contract for its chief executive officer—one the company said in regulatory filings would be aimed at removing any disincentives the CEO might have to sell the company. But in an interview with Telephony this week, Kraus cautioned against reading too much into those words.
"There's nothing in that language other than the normal review cycle that's going to be addressed," he said.
Asked if the board was searching for a new CEO, he said, "We're not."
"It's been a rough go here," Krausz said. "There have been a lot of reasons that put us behind the eight ball. The audit investigation took a lot of steam out of our sails. But we're through that. And we have a lot of confidence in the management team and in the market."
Occam's critics agree that the company's products and trends in the market it serves are cause for optimism. But although the audit investigation and financial restatement are both concluded, the access equipment vendor continues to work through significant problems with its internal control processes. It's unknown how long it will take for Occam to implement a list of 17 recommendations made by auditors to improve the company's accounting. And in the near term, the entire episode is expected to bring sharp declines in revenue and earnings.
"The burden on financial organizations of being a public company now are different than they may have been a decade or so ago," Krausz said. "There are a lot more control requirements. It's a much more demanding control environment. I don't think this is a different kind of story than you heard across a lot of young companies trying to go public."