FREMONT, CA–(Marketwire – Mar 29, 2012) – Network Equipment Technologies, Inc. (“NET”), a leading provider of enterprise-class networking solutions optimized for secure real-time communications, announced today that Nicholas Keating has retired as President and CEO. The company’s Board of Directors has named David Wagenseller, currently CFO, to serve as acting President and CEO. Karen Carte, currently Vice President and Chief Accounting Officer, will assume responsibilities as acting CFO in addition to her current duties. The actions will be effective April 2, 2012. Keating will remain on the Board and will provide advisory consulting services to the company.
Under a broad restructuring plan announced on January 5, 2012, the company has been seeking to reduce expenses in order to preserve capital resources and accelerate a return to break-even operations. This effort has included targeted reductions in the company’s global workforce, including the elimination of 40 positions earlier in the current quarter. Together with additional actions taken presently, the company’s headcount has been reduced by approximately 90 employees as compared to the beginning of the year, which is beyond the initial reduction target established in January. As a result, the company currently estimates that it will incur restructuring charges during the quarter for severance and termination benefits of up to $1.6 million. In addition to the restructuring plan, the company continues to explore alternatives such as strategic transactions or otherwise adding to its capital resources.
“We believe in the future of our new products that address the growing markets for unified communications (UC) and enterprise session border controllers (eSBC),” said Wagenseller. “We have been adding new customers and our enterprise business has been growing. Right now, though, the highest priority is to reduce our cash burn. As a result, we have taken actions to aggressively pare expenses, with the goal of achieving cash flow break-even against current revenue levels. Some of our current cost reduction actions will involve cash outlays continuing into the early part of the new fiscal year, but we are aiming to be cash-flow break-even in our second quarter. In reducing costs, we have sought to make targeted cuts that will preserve our ability to provide additional product features for the UC and eSBC markets and deliver on sales opportunities. The current actions are also a further step in transforming the company and bringing greater focus to the markets that have the largest growth potential.”
“On behalf of the company, I want to thank Nick Keating for his leadership of NET over the last seven years,” said Dixon Doll, Chairman of the Board. “He provided the guidance and direction the company needed to reestablish a competitive entry position in the enterprise networking market while sustaining the Federal business.” Keating responded, “It has been an honor to have led such a dedicated group of employees during my time at NET.” Doll continued, “I believe that NET has a tremendous opportunity in the exciting unified communications market and that David Wagenseller is the right person to lead NET through this current transition period.