Ezenia! dumps its president



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Ezenia! Inc. announced Wednesday that it laid off its president last week to save money, the latest sign of the company's financial troubles.The Nashua-based software firm - which lost $620,000 for the last quarter and $2.7 million last year -- is down to $1.76 million in cash and has $612,000 in equity. In the last four years, the company posted net losses of $13.9 million.The losses "raise substantial doubt about our ability as a going concern," the company said in its SEC filing, which its accountants echoed. "The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors, suppliers and employees."The company laid off half of its workforce last month, and three board members quit suddenly. In February, it was forced to add a board member placed by creditors because the company did not meet its targets.On the plus side, the company said it had $1.7 million in deferred revenue coming, as well as a "committed backlog pipeline" of approximately $600,000.Ezenia "relieved" Peter Janke of his responsibilities as president and chief operating officer on April 1 in an effort to "eliminate a layer of management" as part of the company's "continuing drive to reduce expenses," the firm said. But Janke will continue to serve on the board.Janke, a former Raytheon executive and vice president of Seneca Group LLC, a consulting and revitalization consulting firm, joined the firm as a board member in June 2010 and took over CEO Khoa Nguyen's duties as president last September, with a base salary of $240,000 and some 300,000 stock options. He also signed a severance agreement entitling him to receive a salary continuation for six months if he is terminated by the company "without cause."Nguyen remained Ezenia's CEO and chairman. Nguyen's compensation for 2010 has not been released yet, but he earned a compensation package of $770,000 in 2009, including a base salary of $285,000.On March 31, the day before it laid off Janke, the two-decade-old firm disclosed in its annual 10K filing with the SEC, that its revenue dropped by 31 percent from the same quarter a year earlier, to $660,000, and by 24 percent, to $2.7 million, for 2010.In early March three Ezenia board members -- John A. McMullen , Ronald Breland and Gerald Carmen resigned.Carmen, a former chair of the state Republican Party, was administrator of the General Services Administration during the Reagan administration and U.S. ambassador to the United Nations mission in Geneva, Switzerland. Carmen also once chaired Citizens for America, a conservative "grassroots" group that backed President Ronald Regan's foreign policy initiatives.The company said the main reason for the decline was that it was losing business to military contractors because the Defense Information Systems Agency was giving away office communication software that competed with Ezenia's product. Because of ongoing cost cutting - the latest, a reduction in workforce from 25 to 13 in early March - the company lowered its net loss from $3.4 million to $2.8 million, resulting in a net loss of 18 cents a diluted share last year.At Wednesday's close, the stock was trading for a nickel, unchanged since March 28. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

 

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