Blue Coat CEO Out As Q1 Earnings Decline7:39 PM EST Tue. Aug. 16, 2011
Blue Coat Systems President and CEO Michael Borman has left the company less than a year after taking over its top job, Blue Coat confirmed Tuesday.
Borman's departure comes the same day that Blue Coat reported a sizable drop in sales and profits for its fiscal first quarter, as well as a tepid outlook for its fiscal Q2.
Stepping into Borman's role is Gregory Clark, most recently president and CEO of Mincom, an enterprise software company acquired in July by the ABB Group. Clark will also become a member of Blue Coat's board of directors, and he starts at Blue Coat officially on Sept. 15. Carol G. Mills, a member of Blue Coat's board, is interim CEO until Clark joins the company.
"Our first quarter results were disappointing as they came in below our expectations," said David W. Hanna, chairman of Blue Coat's board of directors, in a statement. "We are taking the necessary actions to reinforce our leadership position in the Web security market, while capitalizing on opportunities in the WAN optimization market based on our strong competitive advantages."
For its fiscal first quarter, Blue Coat posted sales of $109.5 million, coming in below estimates of $113.4 million and down from $120.7 million in the year ago quarter and also the $120.7 million Blue Coat posted in its fiscal Q4 2011.
Blue Coat also posted profit of $2.7 million, down from $13.9 million in the year-ago quarter and $9 million in its fourth quarter. It further forecast second quarter sales of between $103 million and $110 million, which is below analyst estimates of $116 million according to an average of analysts polled by Thomson Reuters.
Gordon Brooks, Blue Coat's senior vice president and CFO, noted that Blue Coat's product revenue took a hit from U.S. federal spending declines.
"While we continue to address our go-to-market challenges, product revenue was also impacted by weakness in the U.S. federal vertical," Brooks said in a statement.
Borman became CEO of Blue Coat in August 2010, after two years as CEO of Avocent. Before being named to Avocent's top job in July 2008, Borman had a 30-year career at IBM and was in 2008 IBM's top software sales executive, in charge of $20 billion in annual sales and a 15,000-employee sales force. Borman was named to CRN's list of the industry's Top 25 Most Innovative Executives in 2007.
Before Mincom, Clark was CEO of E2open, a specialist in cloud-based supply chain applications. Earlier in his career, he was the founder of Dascom, a security software company acquired by IBM in 1999 and whose product set became the basis of IBM's Tivoli security product line. Clark was IBM's Distinguished Engineer for security technology and vice president, Tivoli Systems, during his time at Big Blue.
"I am looking forward to joining Blue Coat and leading the team to expand Blue Coat's market leadership," Clark said in a statement. "It is a great company with a long heritage of innovation, a terrific portfolio of assets and an impressive customer base."