CARRIER ACCESS (CACS)

[Kirk]

Carrier Access loses 3 execs

Story: http://www.bouldernews.com/bdc/local_business/article/0,1713,BDC_2461_3049078,00 .html

Carrier Access loses 3 execs
Former vice presidents say they chose to leave

By Matt Branaugh, Camera Business Writer
July 20, 2004

The astronomical rise of Carrier Access Corp.'s stock was the talk of 2003.

But in 2004, three key executives have made quiet exits.

Monday, the Boulder-based telecommunications equipment provider, which releases second-quarter results today, confirmed the recent departures.

All three — Teddy Wyatt, the company's vice president of engineering, Mark Nixon, the company's vice president of marketing, and Russ Hawkins, the company's senior vice president of original equipment manufacturers and international sales — say they chose to leave on their own terms.

Nixon and Wyatt both declined to comment on their reasons. Nixon said he is pursuing a noncompeting telecom-related business in the Denver area.

Hawkins, who was president and chief executive of the 5-year-old Paragon Networks when it was acquired by Carrier Access for $20.6 million last year, said his plan always was to help integrate the businesses, then leave.

"I made it clear to the team at Carrier that I was intending on becoming the CEO of another company," said Hawkins, who now heads InfiniCon Systems in Pennsylvania. "There was no issue there."

Michelle Chase, Carrier Access' director of corporate communications, said the company is looking to fill the positions.

"With the life cycle of the company at this time, it's good timing for us to update our management team," she said.

The 238-employee business originally was founded in 1986 by current CEO Roger Koenig as Koenig Communications. Like most companies, Carrier Access emphasizes the significance of keeping key management, sales and engineering personnel in quarterly filings made with the Securities and Exchange Commission.

Carrier Access makes and sells broadband access equipment for communications service providers, helping those providers upgrade their network capacities and deliver voice and data communications more effectively. Major customers include T-Mobile USA Inc., XO Communications and Nortel Networks Inc.

It was hit hard in 2001 and 2002, when the competitive local exchange carriers brought on to challenge incumbent phone companies began to falter. In 2000, 62 percent of Carrier Access' sales came from CLECs, while only 5 percent came from wireless providers.

The company rebounded in 2003 after focusing on wireless providers. By first quarter of this year, CLECs chipped in 13 percent of Carrier Access' sales, while wireless customers contributed 68 percent.

Research and development investments, though, have lagged, even though the company says in its filings that it needs such investments to remain competitive. In 2003, Carrier Access spent $11 million on research and development, down substantially from $23.7 million in 2002 and $33.6 million in 2001.

"We continue to invest in research and development where it makes sense," Chase said.

In 2003, the company made $2.5 million on sales of $62.6 million, compared to a loss of $52.7 million on sales of $50.2 million the year prior.

Carrier Access' shares soared 3,200 percent during 2003, making it the country's best performer among stocks traded on the major exchanges with a market capitalization of $250 million or more.

Carrier Access (Nasdaq: CACS) closed Monday at $12.65 with a market cap of $426 million. Its stock's highest close during the past 52 weeks was $16.78 on Jan. 16. Earlier this year, the company raised $78.5 million in a secondary stock offering.

Contact Camera Business Writer Matt Branaugh at [phone] or branaugh