Citrix Mulls Wide Overhaul, Chief Executive Retires, Board Shakeup Amid Activist Pressure
Virtualization provider Citrix (CTXS) appears to have acquiesced to pressure from activist investor Elliott Management, agreeing to give up at least one board seat, position its GoTo webconferencing line for sale, and move aside longtime chief executive Mark Templeton.
The well-liked Citrix boss, who’s been at the company’s helm for 21 years and last year said he would retire but then recanted, again said he will step aside for a replacement and relinquish his board seat as well.
Jesse Cohn, Elliott portfolio manager and head of U.S. equity activism, who in the last two years has compiled an impressive list of IT conquests, will immediately join the Citrix board, replacing Asiff Hirji, who had been a director since 2006 as now serves as Hewlett-Packard’s (HPQ) chief restructuring officer.
In addition, Elliott will have a say in Citrix’s search for another independent board member.
Citrix also agreed to sell or spin off its GoTo webconferencing portfolio and already is in discussions to sell its ByteMobile business, apparently yielding to pressure from Elliott there as well. The company said it has hired a financial advisor to handle the ByteMobile sale.
Taking the long view, Citrix also formed an Operations Committee headed by board member Robert Calderoni to review of its operations and capital structure, specifically its overall product portfolio and profit potential. As part of that deal, Calderoni has been appointed executive chairman of the board with Thomas Bogan assuming the role of lead independent director.
Citrix’s moves comes amid a favorable FQ2 2015 in which the company posted a 94 percent year-over-year spike in net income to $103 million, or $0.64 a share, on a 2 percent revenue increase to $797 million.
“We are starting to see the benefits of the restructuring actions we took at the start of 2015 in terms of margin expansion,” said Templeton.
“Through the additional actions we are announcing today, we’re taking steps to ensure that we are focusing all of our energy on our core secure app delivery offerings and setting the company up for even better execution, greater efficiency and profitable growth,” he said.
The vendor’s Q2 results are in stark comparison to its 2014 performance when earnings fell 26 percent on an 8 percent sales uptick for the year.
In January, Citrix disclosed plans to cut some 900 jobs, including 700 full-time positions.