Guidance Software is seeking profitability and a permanent CEO

Guidance Software is seeking profitability and a permanent CEO
"Cybersecurity is one of the most exciting things we are doing now," says Barry J. Plaga, Guidance Software interim CEO. "Hackers leave behind artifacts, a trail of breadcrumbs, and we're able to find those items." (Allen J. Schaben / Los Angeles Times)

Guidance Software Inc. has built its business around helping to catch criminals.

The Pasadena firm provided the forensic tools to analyze Osama bin Laden's computer hard drives. Kansas police used the company's EnCase software to find digital clues on a floppy disk that exposed BTK serial killer Dennis Rader.


"There are well over 500 criminal cases that we have been involved in," said Barry J. Plaga, who has served as Guidance Software's interim chief executive since last year.

More recently, the company's expertise has been sought in the growing number of cases involving employee misconduct, hacked business files, computer break-ins and the recovery of materials that had been deleted.

Plaga said the company's software can be used to determine how a computer network was breached and by whom.

"Cybersecurity is one of the most exciting things we are doing now," Plaga said, adding that Guidance Software has the ability to discover when and where the breach originated. "The hackers leave behind artifacts, a trail of breadcrumbs, and we're able to find those items."

Guidance Software was founded in 1997 and proved popular with government, businesses and law enforcement agencies that needed the right software and expertise to conduct high-tech digital sleuthing.

The company's scope includes computer forensics for trial evidence and testimony in areas such as intellectual property theft, incident response and compliance auditing.

The latest

In February, Guidance Software said that fourth-quarter sales increased to $28.2 million, compared with $28 million a year earlier. The company's losses narrowed to $3 million, from $3.3 million a year earlier.

The company also told the Securities and Exchange Commission that it may sell up to $30 million in stock and warrants.

In March, Guidance Software appointed software executive Max Carnecchia to its board of directors. Carnecchia headed Accelrys, a San Diego life science software maker sold last year to 3-D software company Dassault Systemes of France. Carnecchia subsequently became chief executive of the combined companies' Biovia-Dessault Systemes operations.


Proof of Guidance Software's ability to find crucial digital evidence came soon after its founding, in the 1998 murder of a 7-year-old girl in a Nevada casino. Prosecutors were able to obtain a guilty plea from the killer after the company's software found child pornography and chat sessions describing fantasies about young girls on his computer.

Guidance Software says it trains more than 6,000 business, law enforcement and government workers annually on how to use its software. Customers include the CIA and 70 members of the Fortune 100.



Guidance Software is in need of a permanent chief executive after the November resignation of Victor Limongelli.

The company is still struggling to become profitable, although losses have narrowed. In March, the company's stock hit a new 52-week low of $5.19.

"We are taking proactive efforts to remediate our sales execution," Plaga said.


Of five analysts that regularly cover the company, one rates it as a buy and four others suggest holding the stock.

Imperial Capital, for example, downgraded Guidance Software to "in-line," from "outperform," in November, blaming the company's weaker-than-expected outlook and its leadership change.

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