Apr 26, 2004 (10:04 AM EDT)
CA Names Interim CEO, Restates Financials
Read the Original Article at InformationWeek
With former chairman and CEO Sanjay Kumar now serving as chief software architect, Computer Associates on Monday made more moves that it hopes will satisfy federal investigators. The software vendor named Kenneth Cron as interim CEO and Jeff Clarke as chief operating officer. It also restated financial results from 2000 and 2001 in an effort to stave off penalties from the Securities and Exchange Commission.
Cron, former president of CMP Media, the parent company of InformationWeek, has been on CA's board for two years. Lewis Ranieri, CA's new chairman, said during a conference call that Cron demonstrated sound judgment of CA issues and brought a wide industry perspective. In previous positions, Cron was a president of technical publishing, a chief operating officer for an entertainment company, and led the development of a popular Web site. "I want to clarify the real business value of our technology," Cron said during the conference call. He cited small and midsize business customers, information life-cycle management, and storage as areas of focus.
However, Cron said he has no intentions of seeking the permanent CEO position. CA is interviewing executive search firms and doing an analysis of the requirements for the position, Ranieri said, adding that the board has decided to keep the roles of chairman and CEO separate.
At CMP, Cron was responsible for all U.S. business, including print magazines such as InformationWeek plus trade shows and online services. More recently, Cron was CEO of Vivendi Universal Games, a maker of interactive entertainment games, and Uproar Inc.
Clarke, who joined CA earlier this month as CFO, was CFO of Compaq and played a key role in the $19 billion merger with Hewlett-Packard in 2002, integrating the financials, operations, and cultures of the two companies. Until late last year, he served as HP's executive VP of global operations, managing HP's $50 billion procurement function.
Also, Greg Corgan was appointed senior VP for worldwide sales. He succeeds Stephen Richards, who resigned. Corgan will report to Clarke, who for now will serve as both CFO and chief operating officer.
CA also restated financial results from the early part of the decade, when the vendor continued with practices of the 1990s, when revenue was recorded when it was most profitable, not when the money came in. CA filed a Current Report on Form 8-K with the SEC for the fiscal years ending March 31, 2000, and March 31, 2001. According to the filing, total bookings of $2.2 billion were recorded in premature quarters. Under the revised filings, revenue in fiscal 2000 went down $2 million, from $6.094 billion to $6.092 billion, but increased in fiscal 2001 by $558 million, from $4.190 billion to $4.748 billion. Consequently, the net loss for the year dropped by $333 million from a previously reported figure of $591 million to a restated loss of $258 million. There was no effect on financial statements or stockholder equity beyond 2001, the company said.
One analyst says Cron was the only choice among people who were familiar with CA because he has the best chance to keep the company on track while it searches for a permanent CEO. "He could be the right person to keep CA in a holding pattern," says Jasmine Noel, an analyst at research firm Ptak Noel Associates. "He has to keep CA from crashing and burning during the search."