Just a few weeks after Mitel Networks downgraded its first-quarter revenue guidance, the Ottawa tech giant announced Thursday that CEO Don Smith would step down and restructuring changes would take place.
Mitel CEO Don Smith.
Shares of the corporation, which just filed an IPO earlier this year, have tumbled in past weeks – from about $9.00 on Aug. 9 to $6.55 the day that Smith's resignation was announced.
That's about half of the $12.30 that shares opened at in April.
The company also warned that tougher times could come, despite tripling revenues year-over-year in first-quarter results also released Thursday.
"While proud of our achievements during the fiscal quarter, we nonetheless experienced softness in our target markets as the slower than expected economic recovery has continued to limit the SME market's access to credit," stated Steve Spooner, chief financial officer of Mitel.
"We continue to focus on execution and driving market share growth, as evidenced by our previously announced changes in our U.S. management team, while keeping a close eye on our operating model to ensure expenses remain in line with revenues."
"It has been a privilege for me to serve with a great team over the past several years," Mr. Smith added in a statement.
"I will work with the board to ensure a successful transition of leadership at Mitel. The company remains focused on executing against our long-term strategic plan."
The tech firm's profit tripled in the first quarter of fiscal 2011, while its revenue remained fairly flat.
The company earned US$6.8 million (or 12 cents per share) in the quarter, compared with $2 million (a loss of 66 cents per share) in 2009.
Revenue was $160 million in the quarter, compared with $159.4 million in 2009.
And income before interest, taxes, depreciation and amortization was $20.4 million, consistent with the $19.5 million posted in the first quarter of fiscal 2010.
Customers picked up in the quarter include the National Unified Procurement Company, Mark Barnes & Associates, Memorial University of Newfoundland, and Packaging Inc.
Mitel also announced it would do restructuring in tandem with Smith's departure, but said it would not release details until its next quarterly results are reported.