Patti S. Hart, the former CEO of Telocity until its recent acquisition by Hughes Electronics, has been named as chairman and chief executive of Excite@Home, the world's largest provider of high-speed Net access with more than 3.2 million subscribers.
For the past week, Hart was expected to be named to the company's top post. Current Chairman George Bell resigned Tuesday and will leave the company.
"I would be lying to you if I said that in the six short hours that I've held the position that I've come up with a comprehensive plan," Excite@Home CEO Patti Hart said in an interview. "But I've spent a lot of time getting to know the company during the interview process, and the thing that's attractive to me is that there are many companies in the broadband and media markets that are struggling with cash crunches, but the thing that sets Excite@Home apart is the incredible set of assets that they've accumulated."
Those assets, however, have not produced much financial success in recent quarters and the company Tuesday posted a first-quarter net loss of $61.6 million, or 15 cents per share, on revenue of $142.8 million compared with a loss of $4.6 million, or 1 cent, on revenue of $138 million in the same period last year.
The per-share loss was within a range of 14 cents to 15 cents forecast last week by Excite@Home executives but fell slightly short of Wall Street expectations, which called for a loss of 14 cents, according to First Call. Prior to last week's financial warning, Wall Street expected a loss of 13 cents per share, according to First Call.
"The quarterly results were largely in line with our expectations in spite of what was a very harsh quarter in our media businesses," said Excite@Home Chief Financial Officer Mark McEachen. The company said revenue from its advertising-based content businesses fell 41 percent year-over-year to $45.1 million. The Internet ad market has fallen on hard times across the sector in the past year, leading Excite@Home to focus its efforts on its core high-speed cable modem service.
The company said Net access revenues increased 80 percent on a year-over-year basis to $75.4 million. Executives expect to end the second quarter with 3.6 million subscribers and anticipate 4.8 million to 5.1 million customers by year-end.
With her appointment, 44-year-old Hart becomes Excite@Home's fourth CEO since 1995. Kleiner Perkins Caufield & Byers venture capitalist William Randolph Hearst III, a director who helped lead the search for a CEO, led the company--known then as @Home Network--in its early days. Hearst was followed by Tom "T.J." Jermoluk, who was at the helm from its IPO until it merged with Excite.
Bell has steered the company since the merger, which was intended to combine Internet content with fast network connections. But the company is slowly abandoning that strategy and focusing instead on expanding its broadband access business.
"I think what I bring is no better or worse than those before me; it's just the next stage of the company," Hart said. "The three of them each had a chapter in the company that was suited to their skills. What I bring is a maniacal focus on operational results. Where I've built my living is on building subscriber bases."
Hart was selected for her knowledge and background in network-related technology businesses. Prior to joining Telocity, a high-speed DSL (digital subscriber line) service provider, she served as president and chief operating officer of Sprint's long-distance unit.
But, until Monday, Hart's appointment was not certain.
A source familiar with the process said Hart was the lead candidate since her interview late last winter. Despite promises by the company to name a replacement for Bell, who announced his intention to step down as CEO last September, by the end of March, the first quarter came and went without a successor.
Then, another source close to Hart said she was surprised at last week's announcement of Excite@Home's weaker-than-anticipated financial condition. The company lowered its guidance for Wall Street last week and said it is facing something of a cash crunch.
Hart downplayed the situation.
"There were no surprises, and I feel good about the financial position of the company," Hart said. "There was never a time when I thought I wouldn't join them. There was a time last week when the board had higher priorities than my negotiations, so, appropriately, we took a break for a few days. But I tell you, they embraced me during that process. I don't think there was ever a time when they didn't want me to join them."