Don Joos Named CEO as ShoreTel Posts Record Gains
Don Joos took over the reins from Peter Blackmore as CEO of ShoreTel Thursday as Blackmore announced fourth-quarter and year-end earnings showing record-setting results while the company moves ahead on its growth path.
“I’m very excited for this opportunity to lead ShoreTel,” Joos said during the earnings call, after being introduced by Charles Kissner, chairman of ShoreTel’s Board of Directors. “We have a dedicated employee workforce, a strong premise business, growing cloud service offerings, a large and exceptional partners base and industry- recognized, outstanding customer service. This makes us well-poised to seize this growth opportunity and extend our leadership position.”
Blackmore, who announced May 10 that he would retire once ShoreTel found a successor, endorsed the selection of Joos as CEO. “I have every confidence in Don,” he said in a statement. “I also think Don is the perfect fit to lead ShoreTel given the strategy has been developed and implemented with the current executive team. Put simply, the executive team we have built is strong and well aligned and clearly delivering good results. Don is the right leader for this next stage of ShoreTel and I wish him and the executive team and all of you every success.”
Blackmore is stepping down as ShoreTel’s CEO as the company reported strong gains for the fourth fiscal quarter of 2013 and for the fiscal year. “We ended the year on a very high note, with a record performance in revenues and in non-GAAP operating income,” Blackmore said.
For the fourth quarter of fiscal 2013, revenue was a record $85.6 million, an increase of 9 percent sequentially over the third quarter of fiscal 2013 and an increase of 9 percent from the fourth quarter of fiscal 2012. Non-GAAP net income for the fourth quarter of fiscal year 2013 was $3.4 million, or $0.06 per share which excludes stock-based compensation charges, amortization of acquisition-related intangibles, other charges and related tax adjustments. This compares with a non-GAAP net loss of $0.2 million, or $0.00 per share, in the fourth quarter of fiscal 2012.
For the 2013 fiscal year, revenue was a record of $313.5 million, up 27 percent from fiscal year 2012. The non-GAAP net loss for fiscal year 2013 was $1.6 million, or $0.03 per share, which excludes stock-based compensation charges, amortization of acquisition-related intangibles, litigation settlement costs, severance and other charges, and related tax adjustments. This compares with a non-GAAP net loss of $1.4 million, or $0.03 per share, in fiscal 2012.
Blackmore pointed to gains by both ShoreTel’s on-premise business and its cloud-based operation, ShoreTel Sky.
“Our decision to add a cloud business continues to be reinforced as very strategic,” he said. “While the majority of the market is still comprised of premise UC purchases, the cloud portion of the market is growing rapidly. Our solid position in the UC as a Service market enables us to take advantage of this growth.”
ShoreTel Sky revenues of $19.3 million were up 6 percent sequentially over the third quarter of fiscal 2013, which brought fiscal year 2013 revenue growth to 26 percent over fiscal year 2012 on an organic basis. The total number of installed customer seats increased 49 percent over the fourth quarter of fiscal 2012.
Premise revenues of $66.3 million increased 10 percent sequentially from the third fiscal quarter and were up 3 percent from the fourth quarter of fiscal 2012. Non-GAAP gross margins in the premise business were 67.8 percent in the fourth quarter of fiscal 2013, compared with 67.1 percent in the fourth quarter of fiscal 2012. The company continued to increase its market share according to Synergy Research. In its latest report, Synergy estimates that the company’s share of the United States Enterprise IP Telephony market increased from 6.4 percent in the December quarter of 2012 to 8.0 percent in the March quarter of 2013.
“Additionally, our ShoreTel Connect hybrid solution, scheduled for GA in first half of calendar 2014, will allow ShoreTel to offer our customers freedom of choice in terms of what parts of their UC system are managed on their site and what parts are managed in the cloud,” Blackmore said.
Blackmore said good progress is being achieved with ShoreTel’s premise partners selling ShoreTel Sky solutions. “Our Q4 bookings from this group grew again and we are building momentum in this very important partner base,” he said. “In fact, 4 out of our top 10 partners this quarter were Premise partners selling ShoreTel Sky solutions.”
ShoreTel’s share of unified communications- as-a-service continues to grow. “According to a report published in June by Synergy Research, ShoreTel continues to have the #1 worldwide share in UC as a Service for customers using private clouds and also moved to the #2 position in customers using either private OR public clouds with approximately 11% of the worldwide market,” he said.
Blackmore, who joined ShoreTel in December 2010, bid adieu to his co-workers. “It has been a privilege to work with all of you and I wish you all every success in the future,” he said.