2 Will Share CEO Title at Struggling Sybase
Sybase Inc. said that Chairman and Chief Executive Mitchell Kertzman will share the CEO title with President John Chen as the struggling database-software maker tries to return to profitability.
The company also said it will buy back as much as $25 million of stock and take a $70-million charge in the first quarter for restructuring. Sybase said earlier this week that it would cut 600 jobs, or about 10% of its worldwide work force.
The company has been struggling to regain its position as a leading maker of software to manage and organize huge libraries of information. It reported a larger-than-expected fourth-quarter loss in January because of weak North American sales and improperly recognized revenue in Japan.
“The charge should return Sybase to acceptable levels of profitability,” said analyst Gary Abbott of Punk, Ziegel & Co., who rates the stock “buy.” “When coupled with the management realignment, we expect Sybase to emerge a stronger and growing company.”
The company said it will need $40 million in cash to cover expenses related to its restructuring this year. Sybase said it expects the restructuring to reduce its expenses by $100 million in 1998. Kertzman said the company expects to break even or report a modest profit in the second quarter.
Sybase shares fell 6 cents to close at $10.63 in Nasdaq trading. The company released the news after the close of U.S. trading.
Sybase said it created an office of the chief executive in which both Kertzman and Chen will oversee strategy, operations and customer relationships. Kertzman, 49, said his decision to share the CEO title with Chen, 42, reflects the two executives’ work as peers.
“My plan had been that John will ultimately become sole CEO of the company and I would be an active chairman,” Kertzman said. “It recognizes that John has been a leader in development of strategy of the company.”
He and Chen declined to say when Kertzman might step aside as chief executive.
“It depends on how well the business goes and how smoothly the transition goes,” Chen said. “This is an enterprise on the rebound. We thought we would formalize this so we could use our time efficiently.”
Kertzman dismissed speculation that Sybase made the changes to prepare for a sale of the company.
“We’re planning to be an independent company,” he said. “We don’t speculate about the future. We’re running the business on the assumption that we’re going to be independent.”
Emeryville-based Sybase also named Michael Gardner senior vice president of worldwide sales, replacing Mike Forster, who will retire at the end of the year.
Gardner has worked at companies including International Business Machines Corp. and ACT Networks Inc.
