GenRad's Shaky Day

Electronic News, April 17, 2000 by Marie Eve Demers

Two announcements made last Tuesday by GenRad Inc. came unexpectedly for people in the industry and caused Wall Street to react by dropping the price of the company's shares.

After approximately 10 years at the helm of GenRad, James F. Lyons is no longer chairman of the board, president, and chief executive officer. The Westford, Mass.-based company said last week Lyons departed the organization and was being replaced by former EMC Corp. executive Robert M. Dutkowsky.

The reasons behind Lyons departure are not known. GenRad excluded any information regarding the circumstances of the departure, which some are calling a sudden move that came without any warning to stockholders. Lyons will remain with the company as a consultant in order to ensure an easier transition, according to GenRad.

Dutkowsky previously held a position as president of Data General, an EMC division that provides centralized computing products. When he first joined that company in 1997, he was vice president, markets and channels.

Prior to EMC, he filled various senior-level positions at IBM, including vice president of worldwide sales and marketing for the company's RS/6000 business.

On the same day GenRad announced the management change, it also released its financial forecast for the first quarter. Analysts' estimation of 15 cents a share earnings will not be met by the company, which expects a mere 6 cents to 8 cents per share. However, the company anticipates a 20 percent growth in revenue compared to the same quarter in 1999. GenRad attributes its poor earnings results to higher development costs for components and new product engineering as well as delays in major account commitments. The news caused the company's stocks to plunge by 25 percent that day, closing at $10.

Whether Lyon's departure is related to the poor financial results could not be confirmed or denied; Dutkowsky was unavailable for comment by press time.