CEO, Michael Fister, a former Intel Corp. executive. In addition to Fister's resignation according to the company's press release,The company also announced other executive resignations: Kevin Bushby resigned as executive vice president, worldwide field operations; James S. Miller, Jr. as executive vice president, products and technologies organization; William Porter as executive vice president and chief administrative officer; and R.L. Smith McKeithen as executive vice president, corporate affairs.The major management shuffle comes as the company continues to face a difficult business and financial environment. The company has experienced a number of consecutive
weak quarters. The company, according to a story by Shirleen Dorman in the Wall Street Journal,
... reiterated its lowered July outlook for a third-quarter per-share loss of 27 cents to 25 cents with revenue of $235 million to $245 million. Third-quarter results are due on Oct. 22.Cadence - which has the largest revenue among companies that sell software for making chips and other electronic products - and rivals have seen their customers' purchasing budgets squeezed by a number of factors, including severe price pressure on memory chips and other products. New production processes that put more transistors on a chip - allowing more complex products - have also led to rising design costs, which deters some companies from developing new chips.
From my perspective the real issue that forced Fister out was his failed effort to acquire Mentor Graphics. Back in June of this year, Fister embarked on an hostile effort to purchase its competitor, Mentor Graphics for $1.6 billion as a way, according to Marketwatch,
... to cut costs and boost market share.
Cadence was forced to rescind its offer in August due to its deteriorating position and the difficulty it was facing as regards to obtaining attractive financing terms. Fisker and his top associates failure in the Mentor Graphics acquisition is very similar to the failure of the hostile acquisition attempt by former CEO of Walgreens, Jeffrey Reins. Both have paid with their jobs. Cadence failed to give a reason for Fister's resignation. According to the press release,
Mr. Fister, who took over as CEO in 2004, had resigned by "mutual agreement" with the board.
To temporarily deal with the management changes Cadence's board set up what they called an "interim office of the chief executive" that includes John Shaven, the company's chairman, Lip-Bu-Ton, a director, and chief financial officer Kevin Palatnik. Cadence faces some very difficult challenges going forward. Hopefully they will be able to put together a top new team capable of guiding the company through what can only be considered extremely difficult times.
Stay tuned.
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