Symbol Shakes Up Management, Restates Financials

CEO and acting chairman Richard Bravman stepped down from both positions, and the company filed its much-delayed annual report for 2002.
Symbol Technologies Inc. on Tuesday reshuffled its management lineup in the wake of a government investigation into its past accounting practices. CEO and acting chairman Richard Bravman stepped down from both positions, and the maker of bar-code readers, handheld computers, and networking systems used to capture, manage, and share data, also filed its much-delayed 2002 annual report, which includes revenue and earnings restatements for the years 1998 through 2001 as well as the first three quarters of 2002.

William Nuti and Salvatore Iannuzzi will take over as CEO and chairman, respectively. Nuti, formerly Symbol's president and chief operating officer, says his plan is to build a governance structure that will improve the company's financial reporting processes and to continue providing customers with the technology needed "to enable enterprise mobility."

Symbol ran into trouble during the second quarter of 2001, when it prematurely recorded about $860,000 in revenue. Bravman, who was part of that accounting decision, said in a company news release that he was voluntarily stepping aside to prevent his involvement with the transaction from influencing the outcome of the U.S. Attorney's investigation of Symbol. The Securities and Exchange Commission is investigating the timing and extent of revenue recognition as well as several categories of cost of revenue and operating expenses.

To correct for improperly recorded revenue, the company is reversing about $234 million in cumulative revenue and $325 million in cumulative net earnings recorded during the course of the restatement period. Symbol is also taking a $98.3 million pretax charge for 2002 as a result of shareholder litigation settlements.

"My goal is very simple," says Nuti, who joined Symbol in August 2002 after a decade at Cisco Systems. "The company is committed to world-class governance. It is important to turn the company around from a governance point of view." Part of this strategy is to divide the chief executive and chairman responsibilities between Nuti and Iannuzzi, who in mid-December joined Symbol as a nonemployee board member.

Also in mid-December, Symbol and IBM disclosed plans to develop new handheld wireless computers running IBM's WebSphere Micro Edition and MQ Everyplace messaging software to let users access data from Siebel, SAP, J.D. Edwards, or PeopleSoft apps as well as IBM DB2e. Symbol will integrate devices with embedded IBM mobile middleware so workers will be able to use their handhelds to rapidly access data from back-end computer systems running on Intel-based IBM xSeries servers.