Both the chairman and marketing chief at Internet security vendor Secure Computing (SCUR) have resigned after the company announced that results for the quarter ended December 31 won't meet Wall Street's expectations.
Secure's stock, which closed Thursday at 8-1/8, traded as low as 6 today but recovered most of the decline, finishing the day at 7-7/8, off 1/4 on the announcement of the resignations and disappointing earnings.
The company also blamed the shortfall on large pending sales that didn't close during the quarter.
Revenues for the fourth quarter will be $8.6 million to $9.1 million, with a loss of 31 to 36 cents per share. Analyst had expected a loss of 13 cents for the quarter, according to First Call. Final results for the fourth quarter and 1996 fiscal year will be announced the last week in January.
Secure Computing, which went public last year, has aggressively acquired other Internet security companies in an effort to expand from being a firewall company into a full-service network security firm.
Kermit Beseke, the chairman as well as former CEO and president who resigned, had been the architect of that strategy. Don Whitbeck, the vice president of international sales and customer service who resigned too, joined Secure Computing when it acquired firewall Border Network Technologies last August.
Jeff Waxman, who joined Secure Computing in November as president and CEO, said the earnings problems pinpointed the company's problems.
"We are in the process of a full-fledged relaunch of the company. We are announcing a new product branding campaign by the end of the month and the availability of our new NT product in February," said Waxman, whom Beseke had recruited to join the firm. "We intend to broaden our OEM relationships and hope to announce new relationships in the first quarter. And we are restructuring our worldwide sales organization to be more focused on a complete distribution channel."
Earlier this week, former Novell chairman Robert Frankenberg joined Secure Computing's board of directors. The board plans to elect a new chairman January 24.