New CEO demonstrates his BakBone with risky move
New CEO demonstrates his BakBone with risky move
Feb 1, 2005: In an attempt to allay concerns and uncertainty over the company's financial affairs after a succession of financial reporting problems in recent months, the newly appointed president and CEO of data recovery software provider BakBone Software, Jim Johnson, has published an open letter to shareholders, customers and strategic partners.
While the letter looks to portray the company's current situation in a positive light, listing its recent major customer wins and partnership agreements, the strategy is a fairly risky one, as those who were previously unaware of the company's financial reporting problems will certainly know about it now, which could potentially outweigh any benefit achieved by the positive spin put forward by Johnson.
In the letter, which is posted on the company's website, Johnson states: "First, coming into an organisation that had recently restated prior financial statements, changed its independent audit firm, and continues to face delays in its financial reporting has been a challenge, but not an insurmountable one. As a result of these delays, some shareholders, customers and especially competitors have questioned the viability of our business and our growth prospects.
"Through this letter, it is my hope that I can communicate the energy and enthusiasm I have witnessed in this company in my short time with BakBone - it is truly remarkable."
Johnson then goes on to highlight some of the 1800 new customers the company has secured in the last six months, adding that the proportion of repeat customers had increased from 10 percent of the total sales a year ago to 25 percent today, a clear indicator – according to Johnson – that current customers are continuing to buy BakBone products.
On the problems the company has had with its financial reports, Johnson said: "The last few quarters have been extremely frustrating for our shareholders….and all of us at BakBone share those frustrations. We continue to work to resolve the outstanding issues in our historical financial statements and to complete the review of our interim financial statements for both fiscal second and third quarters."
Johnson said this additional analysis and review would be a painstaking process which could take as long as five months, but he underlined the company's determination to see it through to its conclusion and make sure no stone is left unturned.
"I can't reiterate enough our desire to complete this review process and distribute our financial reports in order that all internal and external audiences are apprised of the good work being accomplished by this company."
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