Borland Software Corp.'s surprise decision to spin off, rather than sell, its tools business overshadowed the vendor's appointment of a new chief financial officer (CFO).
Borland revealed Tuesday plans to create a wholly owned subsidiary known as CodeGear for its developer tools group, after failing to find a suitable buyer for the operation, which had been up for sale since February.
At the same time, the company also announced its new CFO as well as reporting disappointing third-quarter fiscal 2006 results, with a net loss of US$12.2 million on revenue of $82.4 million for the quarter ended Sept. 30. Borland last recorded a profitable quarter in its first fiscal quarter of 2005 with a net income of $3.7 million on revenue of $71.3 million.
Borland had been hoping to turn a profit in the fourth quarter of fiscal 2006, but now expects to go into the black in fiscal 2007, according to Tod Nielsen, the company's president and chief executive officer.
Eric Prusch is due to join Borland next week as the vendor's new CFO. He'll fill the hole left when Borland's previous CFO Kenneth Hahn quit in July to join another company. In the interim, Michael Sullivan, has served as principal accounting officer. Sullivan, the former CFO of Segue Software, came to Borland when it acquired Segue.
Prusch was previously vice president of finance at accounting software vendor Intuit Inc.'s consumer tax group and before that was CFO at biometric technology company Identix Inc. He's also spent time at consultancy Deloitte & Touche, computer maker Gateway Inc. and PepsiCo.
"He's an expert in finance who will play a significant role in our work to get back to profitability," Nielsen said during a conference call Tuesday. Prusch will also help Borland "scale its business," he added.
Spinning off CodeGear will enable Borland to focus on what it now positions as its core market -- application lifecycle management (ALM) tools. Borland will work through the transition in its operations over the next coming quarters, concentrating on cutting costs and achieving profitability in fiscal 2007, Nielsen said.
Total revenue from ALM products and services for the third quarter was $54.7 million, up 91 percent over the year-earlier quarter, while ALM license revenue was $29.7 million, a rise of 115 percent compared with the third quarter of fiscal 2005.
Since joining Borland just over a year ago, Nielsen has significantly overhauled the company's executive leadership.
In August, Peter Morowski, former Dell Inc. vice president of software, became Borland's senior vice president of engineering in charge of research and development. The company appointed Jonathan Schoonmaker as its senior vice president of human resources in late July, after he'd held a similar position at Business Objects SA.