Tekelec CEO to resign

Fred Lax, Tekelec CEO, announced his resignation today during the company’s third-quarter earning call. He also announced a 39% revenue growth from last year’s third quarter.

Lax will resign effective Jan. 1, 2006.

Tekelec said six months ago it would relocate its company headquarters from California to North Carolina. The company also outsourced its manufacturing operation.

“The transition has gone well. However, as we complete the final steps and close the California office at the end of 2005, I will not be moving with the company,” Lax said. “I have decided, for personal reasons, to stay in California and pursue other opportunities.”

He added that he was proud of the company’s accomplishments and hopes to see it continue to grow.

“I remain committed not only to achieving the final steps in our relocation…but also to ensuring a smooth transition of my own responsibilities to a new CEO,” Lax said.

Tekelec reported record revenue of $148.1 million for the third quarter. Last year the company made $106.6 million.

On a GAAP basis, Tekelec’s net income was $8.7 million, compared to net income of $18.7 million in the third quarter of 2004. Non-GAAP net income for the third quarter of 2005 was $13.4 million, which excludes the effects of acquisition-related amortization, non-cash stock-based deferred compensation, a one-time, non-cash charge for the write-off of acquired in-process research and development related to the iptelorg acquisition and restructuring and other charges related to the relocation of corporate headquarters.

Revenue for the quarter was also up 11% sequentially, and order volumes had a book-to-bill ratio of greater than one for the 12th consecutive quarter. Orders received in the third quarter for Tekelec products and services were $150.7 million, compared to $150.8 million in the third quarter in 2004.

The Signaling Group alone increased revenue to $88.2 million, up 13%, compared to $78 million in same quarter in 2004. The group was up 8% sequentially in terms of revenue.

The Switching Solutions Group revenue increased to $37.6 million, up 149% from last year and up 13% sequentially. Tekelec added 16 new switching customers during the quarter.

The Communications Software Solutions Group revenue increased to $9.8 million, up 216% year-over-year and 38% sequentially.

“The record quarterly revenues for all of our operating groups highlight the progress we are making executing on our strategy focused on next-gen switching, signaling, value-added applications and global expansion,” Lax said. “I believe Tekelec is well positioned as a market leader in signaling and continues to strengthen its position globally in [next-generation] switching and communications software solutions.”