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Enter Sanctum: MySimon CFO Jumps to Security Specialist

Also, will Verticalnet a CFO? Plus, a good day at Round Rock, and goings-on at Avalon.
Jennifer CaplanOctober 16, 2001
  • Gene Godick, CFO of Verticalnet Inc., a Horsham, Pennsylvania-based B2B software maker, is leaving the company to pursue other interests. Godick will remain with the firm during its October 25 third-quarter announcement of its financial results and will stay on until the end of the month to ensure a smooth transition. David Kostman, who has been chief operating officer since March 2001, will fill the position until a permanent replacement is found. Kostman was previously managing director at Lehman Brothers’s Investment Banking Division, where he was head of the Internet B2B group.

    The next head of finance at Verticalnet will be looking to take the company into the black. The company’s financial health continues to improve. While Verticalnet posted a second-quarter pro forma loss of $23.8 million, that’s less than the company lost during the same period last year ($25.5 million. Indeed, management announced that it expects to post a narrower loss than anticipated in the third quarter. The third-quarter loss is now forecast to be between 7 and 9 cents a share (excluding noncash expenses, preferred stock dividends, and other items), compared with the previous loss forecast of between 8 and 10 cents a share. Verticalnet officials say they continue to expect third-quarter revenues in the $31 million-to-$32 million range.

    That’s in line with second-quarter revenues, which came in at $33 million. Management attributes improved performance to a series of cost-cutting measures going forward, which may include possible job reductions, a company spokesperson told Reuters. The spokesperson declined to comment on the details of the plan, however.

    Meanwhile, after the positive news was made public last Wednesday, the software company’s shares gained almost 40 percent. Verticalnet shares have traded as high as $34.18 and as low as 32 cents in the last year.

  • Officials at DuPont Photomasks Inc., a Round Rock, Texas-based maker of devices used to produce semiconductors, hired Satish Rishi as executive vice president of finance and chief financial officer. Rishi replaces Gerd Stoecker, who plans to resign from the company to pursue other opportunities.

    For the last two years Rishi has served as vice president and assistant treasurer at Dell Computer Corp., where he was responsible for all treasury functions, including cash and liquidity management, investments, and financial risk management. Prior to his work at Dell, Rishi spent 12 years at Intel, where he held financial management positions both in the United States and for overseas operations. His last position at Intel was assistant treasurer. Rishi holds an M.B.A. from the University of California at Berkeley and a B.A. in mechanical engineering from Delhi University in India.

    Despite record revenues in fiscal 2001, Rishi’s new job at DuPont Photomasks won’t be easy. In the fourth quarter, the company implemented a restructuring plan, which included ceasing several production lines and reducing the global workforce by about 6 percent. Management expects the measures to help save $12 million per year.

    The cost-cutting will help, but times remain tough in the semiconductor business. In a recent statement, company chairman and chief executive Peter Kirlin painted a bleak picture for the sector. “The current semiconductor market environment is arguably the most difficult in history,” he warned. And analyst coverage is not making things any better. In the last year DuPont Photomasks was downgraded by Morgan Stanley, Robertson Stephens, and Bear, Stearns.

    DuPont Photomasks posted revenues of $408 million in fiscal 2001, a 24 percent increase from the previous year. Fourth-quarter revenues of $92.8 million were essentially flat in comparison with revenues of $93.4 million in the same period the year prior. Net income for fiscal 2001, excluding special charges and gains, was $30 million ($1.63 per diluted share), a 20 percent increase compared with the previous year’s $25 million total ($1.57 per diluted share).

  • Managers at San Jose, California-based Integrated Telecom Express Inc., a provider of circuits and software that enable broadband Internet access, appointed James Williams to the CFO and treasurer posts. Williams replaces Tim Rogers, who resigned to pursue other opportunities. Williams joins the company from Network Peripherals Inc. (which has since merged with FalconStor Software), where he was also CFO. Prior to that he was vice president of finance technology, operations, and business integration at E-trade, an online provider of online investing services. Williams spent 14 years on the board of directors at the National Association of Corporate Treasurers (NACT) and is also a former chairman of NACT’s Investor Relations subcommittee.

    He’ll have his job cut out for him. The semiconductor and communications industries are not exactly humming of late. Revenues in the second quarter decreased 38 percent to $4.3 million from $6.9 million in the first quarter of 2001, as a consequence of the slowdown. The company reported a pro-forma second-quarter net loss of $5.3 million (12 cents per share), compared with a pro-forma net loss of $597,000 (3 cents per share) in the second quarter of 2000. Management recently announced a 13 percent workforce cut and a related $86,000 charge to be taken in the third fiscal quarter. The company also disclosed limitations on capital expenditures and other discretionary spending, and it plans to sublease unused space at both its San Jose and Hsin-Chu, Taiwan, facilities.

  • Managers at Santa Clara, California-based Sanctum Inc., an Internet security software provider, appointed Michael Shannahan chief financial officer. Shannahan will be responsible for driving the company’s overall financial strategy and overseeing the facilities, human resources, and administration functions. Before joining Sanctum, Shannahan was CFO at online shopping site mySimon Inc., where he helped manage the company’s acquisition by CNET in January 2000. Prior to that, he held CFO positions at NetObjects Inc. and Broderbund Software. He helped establish the first international subsidiary and managed several acquisitions at both companies. He was also a partner at KPMG Peat Marwick, where he spent more than 15 years focusing on technology companies. Shannahan holds a B.A. and a B.S. degree from Rockhurst College. Sanctum is a privately held company funded by blue-chip venture-capital firms and industry leaders including Sprout Group, Dell, and Fidelity Ventures. It was founded in 1997 and obtained $30 million in a fourth round of funding in July.

  • Gary Lessing has been named chief financial officer at Gaithersburg, Maryland-based Avalon Pharmaceuticals Inc. Prior to joining Avalon, Lessing was a managing director in the health-care investment-banking group at Deutsche Banc Alex. Brown. While at Deutsche Banc, Lessing focused on mergers and acquisitions, strategic advisory assignments, and public financing for health-care and life-sciences clients. He also headed the company’s European health-care investment banking business. Lessing holds B.A. and M.S.E. degrees from Johns Hopkins University and an M.B.A. from the Wharton School of the University of Pennsylvania.

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