CyberMedia stock down 25%
CyberMedia sees its stock plummet 25 percent after warning of a revenue shortfall and announcing the resignation of its president and CEO.
The company's stock dropped 2-7/16, to 7-5/16, down 25 percent from Thursday's close of 9-3/4.
CyberMedia, a maker of software products that provide automatic service and support to PC users, said it expects revenues to fall as much as 70 percent, within a range of between $5 million and $8 million, for the quarter ending March 31, compared with total revenues of $16.5 million for the same period in 1997.
Unni Warrier resigned as the company's president and CEO, effective immediately, and the board of directors yesterday announced the temporary appointment of Chairman Rekhi as acting president. Rekhi will be assisted in that role by executive committee members Jim Tolonen and Ron Posner. The committee expects to conclude the search for Warrier's permanent replacement in a matter of weeks.
Tolonen resigned yesterday as chief financial officer from networking software player Novell (NOVL), and Kristin Gabriel, a CyberMedia spokeswoman, Tolonen will be spending more time working with CyberMedia to find a new chief executive as a result.
The drop in revenues and executive turnovers, however, have not put an end to the string of troubles Santa Monica, California-based CyberMedia has seen of late.
For one thing, the company said it will reissue results from the quarter ended December 31, 1997, to show an increase in return reserves of between $6 million and $8 million.
"We are working with our major distributors to adjust channel inventory levels as they deem appropriate," Kanwal Rekhi, chairman of CyberMedia's board, said in a statement. "We are also working with our distributors to bring their account balances current with the company.... As a result, we feel comfortable with these revised fourth-quarter reserve levels."
The company also has been hit with a class-action lawsuit alleging that CyberMedia and certain of its officers and directors issued false statements regarding the company's financial condition, as well as present and future business prospects, and improperly accounted for its return reserves in violation of generally accepted accounting principles.
CyberMedia products include First Aid; Oil Change, which updates PCs with the latest bug fixes, patches, and drivers; UnInstaller, which cleans Windows applications; and Guard Dog Deluxe, which automatically safeguards Internet security and privacy.